~ 3095 min
Bloomberg Livestream - 2022-08-21 00:00:00
Talk to me about attracting talent so do you do you worry about you know some of the bright young minds going to JP
Morgan Golman Sax
ORG
because they pay more would you worry about them going to crypto or Google because it's exciting. Well I think what I have found is that Minds Are as attracted by money as they are and probably more by once the vision what's for challenge what do I learn Is this company doing things that I am proud of Care for the environment. Do we care for the communities? Will I be followed in my career and develops which is why we just launched the university These things especially in
the early years
DATE
Take Lot of space in their decision As they move through Come in and they move through when what thick spaces how do you treat them How do you track their career manage their career? Do you give them opportunity? That's why I think we're very fortunate. I can have A young person from
Bosnia
GPE
who start in the leading back in
Bosnia Tour
GPE
into
Germany
GPE
And then A skill set that has been refined goes back and it's the bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction but we have. Would you like most about being chief executive? Trying to make a difference I have been told by many people that no you know this cannot be done or this is difficult this is a little bit my chance to try and do what I think I it's right What I think it's right is usually I get it from talking to people who and if I can make a difference to you in credit and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And I helped What are our principal what we stand for I think that will be a win. Chief executive job came up? Would you be up for it? I love you and create too much. Thank you so much. Thank you,
Francine
PERSON
. You think of cutting edge technology at sea. You might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Cantina
PERSON
shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. I'm from shipping. Certainly not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement To help reduce the admissions from these well stocked maritime
And they move through when what thick spaces how do you treat them how do you track their career manage their career do you give them opportunity that's why I think we're very fortunate to touch when you try it I can have A young person from
Bosnia
GPE
who start in the leading back in
Bosnia
GPE
Does a tour into
Germany
GPE
And then
Skill
PERSON
set that has been refined goes back and it's a bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction but we have. Would you like most about being chief executive? Trying to make a difference I have been told by many people that no you know this cannot be done or Difficult A little bit my chance to try and do what I think I it's right what I think it's right as usual I get it from talking to people who and if I can make a difference to Uni Credit and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And a helped What are our principal what we stand for? I think that will be a win. Executive job came up. Would you be up for it? I love you and you create too much. Thank you so much. Thank you,
Francine
PERSON
. Think of cutting edge technology at sea. You might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. From
Tina Shooping
PERSON
is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. Of all the worlds this huge
Three%
GPE
mean that sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? Access the financial world on demand. Here from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars. Stocked early enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need.
Have been told by many people that no you know this cannot be done or this is difficult. This is a little bit my chance to try and do what I think I it's right. What I think it's right is usually I get it from talking to people who and if I can make a difference to you create and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And a helped What are our principal what we stand for? I think that will be a win. Executive job came up. Would you be up for it? I love you and create too much. I think so much. Thank you,
Francine
PERSON
. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. From Tina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point. But there's a significant unseen cost to the modern era of global commerce. I'm from shipping. Output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? Access the financial world on demand. Hear from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Stocked early enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need. Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks for having us. We actually lived in the same dorm in college.
Just a few years
DATE
apart. So, it's been almost a year since you took From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your first Technology conference. Thank you. I wanna start with a quick report card.
To help reduce the emissions from these well stocked maritime behemoths. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars. Stocked early enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks for having us. Just found out we actually lived in the same dorm in college. So it's been almost a year since you took over From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to unionize in
Amazon
ORG
warehouse your first Technology conference. Thank you. I wanna start with a quick report card. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later he passed the reins to
Andy Jassie
PERSON
his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest
Engines
ORG
,
Amazon
ORG
web services
Basils
PERSON
has stayed on as executive chair leaving Jassie to navigate a critical inflection point in
amazon
ORG
's history. Does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back? On this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade
Review
ORG
of
Amazon
ORG
's performance And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year Customers
DATE
. I think we, you know, I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've done a lot of good And I and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
you know so much of the
PPE
ORG
and food and essential items and people equipping their home offices White from
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very
Financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Stocked earlier enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks. So it's been almost a year since you took over From
Jeff
PERSON
our CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your
first
ORDINAL
Bloomberg Thank you. I wanna start with a quick report car. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later. The architect of
one
CARDINAL
of the company's biggest profit
Amazon
ORG
web services. Has stayed on his executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. How does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers Unionized all while keeping customers coming back. Joining me on this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
. I'd like you to grade Your view of
Amazon
ORG
's And we've got time later to to really dig in. But quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
with Well, I think we, you know, I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've Lot of good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much as the
PPE
ORG
and food and essential items and people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2000
DATE
We grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Never happened before but it was really hard to do that and we had to take the really big footprint of the filmment center footprint we built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
we built out that transportation network in
just a couple of years
DATE
you know we nearly double the size of our workforce during that time and I think you saw it another Businesses, you know,
AWS
ORG
is a really big part of helping And governments have a business continuity during the pandemic and So many companies and organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that transform So, what about investors? I mean, the stock is down significantly from a peak Obviously there's broader market term Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37
CARDINAL
year%, over year, you know, it's not a
74 1 billion dollars
MONEY
revenue. You run It's pretty unusual growth and we grew
58
CARDINAL
Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks. Lived in the same dorm in college
Just a few years
DATE
apart. So, it's been almost a year since you took over From
Jeff
PERSON
our CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. I wanna start with a quick report car. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO The architect of
one
CARDINAL
of the company's biggest profit engines amazon web services
Basils
PERSON
has stayed on as executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. How does the company manage market Rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back
Me
PERSON
on this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade Your view of
Amazon
ORG
's And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
with Worse. Well, I think we, you know, I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've Are good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much as the
PPE
ORG
and food and essential items and people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Never happened before but it was really hard to do that and we had to take the really big footprint of fulfillment center footprint we built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
we built out that transportation network in
just a couple years
DATE
you know we nearly double the size of our workforce during that time and I think you saw it another Businesses, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and So many companies and organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that transform So, what about investors? I mean, the stock is down significantly from a peak Obviously there's broader market term Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37
CARDINAL
year%, over year, you know, it's not a
74 1 billion dollars
MONEY
revenue run It's pretty unusual growth and we grew
58
CARDINAL
year% over year in our advertising business. You know, it's a
One 1 billion dollars
MONEY
revenue run rate business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
, but I think the real challenge for us there is on the car side and there have been several things Happened some of which are more controllable than others you know I think the part that's less control is really around inflation and I think we thought that inflation would start to attenuate in
20
CARDINAL
To and with the war in
Ukraine
GPE
it just went the other way and has significantly accelerated so the cost of trucking and line hall and ocean and air and fuels to substantially going up I think that will tenuate at some point. No one knows how long that'll take. I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taking
about 24 months
DATE
to build new fulfillment centers during
In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later he passed the rains to
Andy Jassie
PERSON
his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profit
Amazon
ORG
web services
Navigate
PERSON
a critical inflection point in
amazon
ORG
's history. Does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back? On this edition of
Bloombrook Studio
ORG
100
CARDINAL
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade
Review of Amazon's
ORG
And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year Customers
DATE
. During
the year
DATE
or not but I I'll give you my take. You know, I think with respect to customers, I think we've A lot of good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much of the
PPE
ORG
and food and essential items and people equipping their home offices were bought from
Amazon
ORG
and and you know, to scale the way we needed to. Remember, in
2000
DATE
We grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate. I mean it's very it's unprecedented. It's never happened before. But it was really hard to do that. And we Take the really big footprint of the film and set our footprint we built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
we built out that transportation network and just a couple years you know we nearly double the size of our workforce during that time and I think you saw it another businesses
AWS
ORG
is a really big part of helping Companies and governments have business continuity during the pandemic and So many companies in organizations in
the last year
DATE
made the strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we've spent a lot of time helping them make that transform So, what about investors? I mean, the stock is down significantly from a peak
Last year
DATE
obviously there's broader market term Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37
CARDINAL
year%, over year, you know, it's not a
74
CARDINAL
bill
Runway
ORG
business. It's pretty unusual growth and we grew
58
CARDINAL
year% over year and our advertising business. You know, it's a
30 One 1 billion dollars
MONEY
revenue runway business. So, some businesses going really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
, but I think the real challenge for us there is on the cause side and there have been several things Happen. Some of which are more controllable than others. You know, I think the part that's less control was really around inflation and I think we thought that inflation would start to attenu In
2022
DATE
. And with the war in
Ukraine
GPE
, it just went the other way. It has significantly accelerated so the cost of trucking and line hall and ocean and air and fuel is just substantially going up. I think that will turn you into some point. No one knows how long that'll take. I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic It's a weird to make decisions you know I made
2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building on properties where we don't need it yet and we've let a number of leases labs and not a small number, you know, both those things. We've had a lot of occasions in Where we've worked on productivity, made improvements, and we have a lot of clearly defined issues and I'm confident we're gonna get back to the right level of profitability. You are gonna sublease
30 1 million square feet
QUANTITY
of space. Is there a mistake in the ex Because of the horrible thing because you have to make these decisions.
You know to scale the way we needed to remember in
2020
DATE
we grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Never happened before but it was really hard to do that and we had to take the really big footprint of the film and set our footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
. We built out that transportation network in
just a couple years
DATE
. You know we nearly double the size of our workforce during that time and I think you saw it another Businesses, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and So many companies and organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that transform So, what about investors? I mean, the stock is down significantly from a peak
Last year
DATE
obviously there's broader market term Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37
CARDINAL
year%, over year, you know, it's not a
74 1 billion dollars
MONEY
revenue Business. It's pretty unusual growth and we grew
58
CARDINAL
year% over year and our advertising business, you know, it's a
One 1 billion dollars
MONEY
revenue run rate business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
, but I think the real challenge for us there is on the car side and there have been several things that have And some of which are more controllable than others. You know, I think the part that's less control was really around inflation and I think we thought that inflation would start to attenuate
2022
DATE
. And with the war in
Ukraine
GPE
, it just went the other way. It has significantly accelerated. So the cost of trucking and line hall and ocean and air and fuels to substantially gone up. I think that will tenuate at some point. No one knows how long that'll take. I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic And so we're to make decisions you know I made
2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building on properties where we don't need it yet and we've let a number of leases labs and not a small number, you know, of both those things. We've had a lot of occasions in our history We've worked on productivity, made improvements, and we have a lot of clearly definitions and I'm confident we're gonna get back to the right level of profitability. You are gonna sublize
30 1 million square feet
QUANTITY
of space. Is there a mistake in the ex Because of the overbuilding. To make these decisions
2 years
DATE
in advance If you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we made the decision to air on the side of our consumers and sellers. Now, how would you grade
amazon
ORG
's performance with employees, your colleagues, there has been some high profi Yeah I I think that And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my But I still think there are many areas that we can keep improving. You know, and I think you know, the first one I I'd mention is safety. You know, I think that you know, in our fulfillment centers, that is the top priority, and you know, when you get into the details, the numbers and outside of all the spin of it Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We are, we've identified kind of a top
100
CARDINAL
list Of areas that we can be better at that we are just metronomically stepping through and so we made a lot of progress but we have a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Slaying on.
You know in in
2021
DATE
grew
37
CARDINAL
year% over year and it's not a
74 1 billion dollars
MONEY
revenue run rate business it's pretty unusual growth and we grew
58
CARDINAL
year% over year and our advertising business you know it's
Two 1 billion dollars
MONEY
revenue runway business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
, but I think the real challenge for us there is on the car side and there have been several Have happened. Some of which are more controllable than others. You know, I think the part that's less control is really around inflation and I think we thought that inflation would start to Anyway in
2022
DATE
and with the war in
Ukraine
GPE
it just went the other way and has significantly accelerated so the cost of trucking and line hall and ocean and air and fuel is just substantially going up and I think that will tenuated some point no one knows how long that'll take I think the more controllable areas for us are really Hour and fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic and so we had to make decisions, you know,
mid 2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for. And so, you know, we we end up with more capacity than we need And and there's a number of things that we're working on. We we've stopped building on properties where we don't need it yet and we've let a number of leases, labs, and not a small number, you know, both those things. We've had a lot of occasions in our history where we've worked Productivity made improvements and we have a lot of clearly define issues and I'm confident we're get back to the right level of profitability. You are gonna sublieze
30 1 million square feet
QUANTITY
of space. Is there a mistake in the ex Because of the horrible thing Have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision. We made the decision to air on the side of our consumers and sellers. Now, how would you grade
amazon
ORG
's performance with employees, your colleagues, there has been some high profi Yeah I I think that And when I started in this gig we had just create a new leadership principle described to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion. But I still think there are many areas that we can keep improving. You know, and I think you know, the first one I I'd mention is safety. You know, I think that you know, in our fulfillment centers, that is the top priority and you know, when you get into the details, the numbers and outside of all the spin of it all. You know, About average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have, we've notified kind of a top
100
CARDINAL
list of Of areas that we can be better at that we are just metronomically stepping through and so we've made a lot of progress but we've a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Slow laying off
10%
PERCENT
of his stuff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane
the World Bank
ORG
just slashed it's forecast for global growth How do you feel about the economic climate I wasn't planning on giving any guidance to the guy. But super bad or super super bad. I think there's some things released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline And if you believe that that equation's gonna flip at some point, which we do, I think it will it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few, obviously, in
25 years
DATE
that
Amazon Customers
ORG
change their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we've a downturn that we have the potential to still grow. We have a road map that's, you know, to probably.
I think the more controllable areas for us are really around fulfillment center capacity and productivity it was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic And so we're to make decisions you know I made
2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building our properties where we don't need it yet and we've let a number of leases lapse and not a small number, you know, both those things. We've had a lot of occasions Where we work on productivity, made improvements, and we have a lot of clearly to find initiatives and I'm confident we're gonna get back to the right level profitability. You are gonna sublease
30 1 million square feet
QUANTITY
of space. Is there a mistake in the Because of the horrible You have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your
year
DATE
at a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we made the decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, their husbands, some high pro Yeah I I think that And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my But I still think there are many areas that we can keep improving. You know, and I think
Yo
PERSON
, the
first
ORDINAL
one I I mentioned is safety. You know, I I think that you know, in our fulfillment centers, that is the top priority and you know, when you get into the details, the number is an outside of all the spin of it all. You know, we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have, we've identified kind of a top
100
CARDINAL
list of Areas that we can be better at that we are just metronomically stepping through and so we made a lot of progress but we have a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Tesla laying off
10%
PERCENT
of his
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed its forecast for global growth. How do you feel about the economic climate I wasn't planning on giving any guidance to the guy. But super bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you believe that that equation's gonna flip at some point, which we do, I think it will it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few, obviously, in
the 25 years
DATE
At
Amazon
ORG
. Customers changed their habits and so you know I also think there's you know those
two
CARDINAL
reasons those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow up we have a road map that's you know Probably
3 to 5 years
DATE
long and we're gonna continue to invent
Continue
GPE
to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employees who are
Paid
ORG
in stock. You know, look, I've haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do in anytime I've tried to a little bit I've been wrong so you know I think it's it's pretty hard to Hard to predict what's gonna be in any short period of time. I do really believe that
Benjamin
PERSON
, you know, that
Benjamin Graham Maxim
PERSON
that in the short term, the stock market tends to be a voting machine in the long term.
Level profitability. You are gonna sublease
30 1 million square feet
QUANTITY
of space. Is there a mistake in the execution Because of the overbuilding. Make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we made the decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, their husbands, some high pro Yeah I I think that And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion. But I still think Many areas that we can keep improving. You know, and I think
Yo
PERSON
the first one I I mentioned is safety you know I I think that you know in our fulfillment centers that is the top priority and you know when you get into the details the numbers and outside of all the spin of it all you know we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We are we've notified kind of a top
100
CARDINAL
list of Areas that we can be better at that we're just metronomically stepping through and so we've made a lot of progress but we've a lot of work just still. Ela must just came out saying he has a super bad feeling about the economy. Tesla laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed its forecast for global growth. How do you feel about the economic climate I wasn't planning on giving any guidance to the guy. But super bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you That that equation's gonna flip at some point which we do. I think it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few obviously in
the 25 years
DATE
that
Customers
ORG
changed their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you know, Probably
3 to 5 years
DATE
long and we're gonna continue to invent. We're You need to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has text just been over valued and this also course matters to employees who are
Paid
ORG
in stock. You know, look, I've haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do and anytime I've tried to a little bit I've been wrong so you know I think it's it's pretty hard to Hard to predict what's gonna be in any short period of time. I do really believe that
Benjamin
PERSON
, you know, that
Benjamin Graham Max
PERSON
and that in the short term, the stock market tends to be a voting machine in the long term. It tends to be a weighing machine. I think if you, you know, we've been through a lot of points
25 years
DATE
to be at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talk about a lot of
Amazon
ORG
, You know in the ultimate output for a company share price you know and then other big outputs of free cash flow or profit or revenue you can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns for investors.
Metronomically stepping through and so we made a lot of progress but we have a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Tesla laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane
the World Bank
ORG
just slashed it's forecast for global growth How do you feel about the economic climate I wasn't planning on giving any guidance
Please Super
ORG
bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you believe that that equation's gonna flip at some point, which we do, I think it will it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few obviously in
the 25 years
DATE
that I've Customers changed their habits and so you know I also think there's you know those
two
CARDINAL
reasons those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow we have a road map that's you know Probably
3 to 5 years
DATE
long and we're gonna continue to invent. We're Continue to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employees who are
Paid
ORG
in stock. You know, look, I've haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do in anytime I've tried to a little bit I've been wrong so you know I think it's a pretty hard Hard to predict what's gonna be in any short period of time. I do really believe that
Benjamin
PERSON
, you know, that
Benjamin Graham Maxim
PERSON
that in the short term, the stock market tends to be a voting machine in the long term. It tends to be a weighing machine. I think if you, you know, we've been A lot of points in
25 years
DATE
at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talked about a lot at
Amazon
ORG
. You know, in the ultimate output for a company, a share price, you know, and then other big outputs or free cash flow or profit or revenue. You can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns for investors and I expect that we true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how? People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with Work with the best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest ambassadors in the world. The people that I would like to have managing my money. At the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure for something As universally important to human life as sleep mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding It's easy to memorize that makes you smart if you can When and how and why to use that information And that's what you bring.
We have the potential to still grow. We have a road map that's, you know, probably
3 to 5 years
DATE
long and we're gonna continue to invent. We're gonna continue to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. Now, when it comes to the stock as I mentioned, it has
Significantly
NORP
. Do you think investors are missing something or has tech just been overvalued? And it's also of course matters to employees who are
Paid
ORG
in stock. You know, look, I've haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public. I have never tried to predict what the stocks gonna do in anytime I've tried to a little bit. I've been wrong. So, you know, I think it's it's pretty hard to Pretty hard to predict what's gonna be in any short period of time. I do really believe that
Benjamin, Benjamin Graham
ORG
,
Maxim
PERSON
, that in the short term, the stock market tends to be a voting machine in the long term intense to be a weighing machine. I think if you, you know, we Through a lot of points
Years
DATE
to be and
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down but you can't really control that. You know, we have a concept. We talked about a lot of
Amazon
ORG
. Words and outputs you know in the ultimate output for a company a share price you know and then other big outputs or free cash flow or profit or revenue you can't Manage the outputs. You have to manage it. The input level. And that's where we spend all our time and so if you do the right things for the business long term, things tend to work out. I think we've had very good returns for investors and I expect that to be true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find On Bloomberg Wealth I'm gonna take you to meet the greatest ambassadors in the world the people that I would like to have managing my money at the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Hey guys crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. For something as universally important to human life as
Mystery
LOC
surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understanding It's easy to memorize that makes you smart if you can Act a lot of facts but if you wanna be wise you really want wisdom you gotta know when and how and why to use that information Should you bring figures out while you're sleeping? What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is
Astro
PERSON
the home roll better is it something else Well you know we have a unique way that we look at big new investments and I'm not sure it's right or wrong it just happens to be our way and we ask ourselves when we're considering something
four
CARDINAL
questions we we ask If it's successful can it be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have carpets there if not can we acquire quickly if we like the answer those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation investments that seem pretty obvious like you know when I got to that company was Only retailer and then we expanded to music and video electronics and the obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something
Who really believe that Benjamin it had
Benjamin Graham Maxim
PERSON
that in the short term the stock market tends to be a voting machine in the long term it tends to be a weighing machine I think if you you know we've been through a lot of points
25 years
DATE
to be at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talked about a lot at
Amazon
ORG
. And outputs you know in the ultimate output for a company a share price you know and then other big outputs or free cash flow or profit or revenue you can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns for investors and I expect that to be true Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors The people that I would like to have managing my money that the start of the internet revolution I picked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Hey Facebook crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs cure. Universally important to human life asleep mystery surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harness to further expand our It's easy to memorize that makes you smart. It can spit back a lot of facts. But if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what your brain figures out while you're sleeping. What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is
Astro
PERSON
the home robot is it something else Well you know we have a unique way that we look at Big new investments and I'm not sure it's right or wrong. It just happens to be our way. And we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask If it's successful it can be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have confidence there if not can we acquire quickly if we like the answer to those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation investments that seem pretty obvious like you know when I got to that company was Only retailer and then we expanded to music and video electronics and obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the time Just imagine what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see amazon strategy as fundamentally different
Netflix
GPE
in Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers.
Manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns for investors and I expect that to be true Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with The best investors you can find from
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Hey guys crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. For something as universally important to human life as
Mystery
LOC
surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harness to further expand our understanding It's easy to memorize that makes you smart if you can Act a lot of fact but if you wanna be wise you really want wisdom you gotta know when and how and why to use that information Should you bring figures out while you're sleeping? What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it
Astro
GPE
the home robot or is it something else? Well you know we have a unique way that we look at big new investments and I'm not sure it's right or wrong it just happens to be our way and we ask ourselves when we're considering something
four
CARDINAL
questions we we ask If it's successful can it be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have carpets there if not can we acquire quickly if we like the answer those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation investments that seem pretty obvious like you know when I got to the company was Only retailer and then we expanded to music and video electronics and obvious people. Other times that process does not lead to investments to seem obvious to people. I mean
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the time. But just And what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments we're making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by being Of prime and and so we've a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show reacher
earlier in the year
DATE
was a huge hit we you know we had
Hazel
PERSON
season we we just launched the boys season which is are you a big boys fan? Is
Amazon Vott
ORG
? It's very good. Of course we've go to the rings coming up you know in
Thursday
DATE
at football. So, I'm very bullish about it. We also, We're excited about what we've done with
MGM
ORG
you know I think some of the assets they're
Hey When and how and why to use that information? And that's what your brain figures out while you're sleeping. What are the moon shots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is
Astro
PERSON
the home robot is it something else Well you know we have a unique way that we look at Big new investments and I'm not sure it's right or wrong. It just happens to be our way. And we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask If it's successful it can be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have confidence there? If not, can we acquire quickly? If we like the answer to those questions, we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation, investments that seem pretty obvious like, you know, when I got to that company was Only retailer and then we expanded to music and video electronics and the obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the time but just
Imagine
ORG
what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see amazon strategy as fundamentally different
Netflix
GPE
in Disney and if so how? Very bullish on it and remember we all the all the miles are a little bit different but for prime video we have
200 1 million
MONEY
plus prime subscribers who are you know get that entertainment for free by Of prime and and so we have a little bit different pricing model than some of the others but I I'm incredibly encouraged but what we have coming if you if you look at me we launched the show Reacher earlier in
the year
DATE
was a huge hit we you know with Nasal season we we just launched the boys season which is are you a big boys fan Voicemail. Very good. Of course, we have go to the rings coming up, you know, in Or
Thursday
DATE
at football. So, I'm very bullish about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the assets there will go very well with the rest of what we Entertainment wise. So, if you look at
Warner Brothers Discovery
ORG
in Paramount Stars in Global. They're building really significant subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant
Three
CARDINAL
business which is you know early stages for us I I'm excited about
Kyper
FAC
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how different
World
LOC
is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. It'll building the world's best personal assistant. You know
200 1 million
MONEY
Already that are using
Alexa
ORG
we're clearly onto something there and then you are automas driving ride healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a Be really significant business. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different companies just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about them. You didn't mention
Astro Hey Robots
PERSON
gonna be feeling right It's not really widely available for sale what's No.
To music and video electronics and the obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the time. But just imagine what
Amazon
ORG
would be
today
DATE
without
Us
GPE
and and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by Part of a prime and and so we've a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show
Richard
PERSON
earlier in the year
DATE
was a huge hit we you know we Mazels season we we just launched new boy season which is are you a big boys fan Hey Facebook It's very good. Of course, we've go to the rings coming up, you know, in
September
DATE
In a football. So, I'm very bullish about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the assets there will go very well with the rest of of what we're doing entertainment wise. So, if you look at
Warner Brothers Discovery
ORG
in Paramount Stars and Global. They're building really Subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant grocery business which is, you know, early stages for I I'm excited about
Kyper
FAC
which is our low earth orbit satellite that were building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how different
World
LOC
is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You're building the world's best personal assistant. We have, you know,
200 1 million
MONEY
So ready that are using
Alexa
ORG
we're clearly onto something there and and then you are our timer is driving ride healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a Be really significant. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different companies just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about them. You didn't mention Astro Hey alexa Our home robots gonna be feeling right It's not really widely available for sale what's I hope you get one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role
these days
DATE
. What kind of executive chair he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside it looks like he's Focusing on philanthropy. He's focusing on space. What kind Executive chairman is he What you know
Jeff
PERSON
has always gonna be involved and he has you know Very lucky to have been in
Amazon
ORG
for
25 years
DATE
. I feel very lucky to have worked directly for
Jeff
PERSON
. For
20
CARDINAL
of them. And we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is the optimize for customers and how high standards they need to be You know given how easy it is for people to switch and the importance of invention and speed and so you know I just feel very lucky to have had the chance to work so closely with them. So is your relationship? I mean he was your only boss Is your relationship Mentally different than it was when you were the head of Every single job you have, the relationship is different. You know, remember, my
Remember we all the all the miles are a little bit different but for prime video we have
200 1 million
MONEY
plus prime subscribers who are you know get that entertainment for free by being Of prime and and so we have a little bit different pricing model than some of the others but I I'm incredibly encouraged but what we have coming if you if you look at me we launched the show
Richard
PERSON
earlier in the year
DATE
was a huge hit we you know we had Nasal season we we just launched the boys season which is are you a big boys fan Voicemail. Very good. Of course, we have go to the rings coming up, you know, in Or
Thursday
DATE
at football. So, I'm very bullish about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the acids there will go very well with the rest of Doing entertainment wise. So, if you look at
Warner Brothers Discovery
ORG
in Paramount Stars in Global, they're building really significant subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build Grocery business which is you know, early stages for us. I am excited about
Kyper
FAC
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how
World
LOC
is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. It'll building the world's best personal assistant. We have it, you know,
200 1 million
QUANTITY
endpoints already that are using
Alexa
ORG
. We're clearly onto There and then you are our timers driving right healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a Be really significant business. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different companies just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about them. You didn't mention
Astro Hey Robots Where
PERSON
is it? It's not really widely available for sale. What's I hope you go one. Okay. Thank you. Everyone's very curious about
Jeff
PERSON
's role.
These days
DATE
, what kind of executive chair he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside, it looks like he's Focusing on philanthropy. He's focusing on space. What kind Executive chairman is he?
Jeff
PERSON
is always gonna be involved and he has you know I I'm I feel very lucky to have been in
Amazon
ORG
for
25 years
DATE
I feel very lucky to have worked directly for
Jeff
PERSON
for
20
CARDINAL
of them and we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is the optimize for customers and how high standards they need to be you know given how easy it is for people to switch The importance of invention and speed and so you know, I just feel very lucky to have had the chance to work so closely with him. So, is your relationship? I mean, he was your only boss for Is your relationship To lead different than it was when you were the head of. Yeah. Of course, you know, every single job you have, the relationship is different. You know, remember, it might
the first couple years
DATE
I work for
Jeff
PERSON
. I work is what we call the shadow then, what's really like achieve the staff That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and and it's different when I'm in the CEO role but you know the constant has always been that Great relationship and we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer in the
Second
ORDINAL
only right now
Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired pulled off this union vote what's your message One like him. Your message to
On
Thursday
DATE
night
TIME
football. So, I'm very bullish about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the acids there will go very well with the rest of of what we're doing Team of wise. So, if you look at
Warner Brothers Discovery
ORG
in Paramount Stars and Global. They're building really significant subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant
Three
CARDINAL
business which is, you know, early stages for us. I I'm excited about
Kiper
ORG
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how different
World
LOC
is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You're building the world's best personal assistant. We have it, you know,
200 1 million
MONEY
That are using
Alexa
ORG
we're clearly onto something there and and then you are our timers driving ride healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a Be really significant visit. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different companies just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about it. You didn't mention
Astro Hey Robots
PERSON
Yet where is it? Yeah. It's not really widely available for sale. What's I hope you get one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role
these days
DATE
. What kind of executive chair he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside it looks like he's really
Kissing
PERSON
on philanthropy. He's focusing on space. What kind Executive chairman is he What you know
Jeff
PERSON
has always gonna be involved and he has you know All very lucky to have been in
Amazon
ORG
for
25 years
DATE
. I feel very lucky to have worked directly for
Jeff
PERSON
. For
20
CARDINAL
of them. And we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is the optimize for customers and how high standards they need to be You know given how easy it is for people to switch and the importance of invention and speed and so you know I just feel very lucky to have had the chance to work so closely with them. So, is your relationship? I mean, he was your only boss Is your relationship Mentally different than it was when you were the head of Every single job you have, the relationship is different. You know, remember, might
the first couple years
DATE
I work for
Jeff
PERSON
, I work is what we call the shadow then, what's really like achieve the staff and That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and it's different when I'm in the CEO role but you know the constant has always been that we
Relationship
LOC
and we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer. In the world.
Second
ORDINAL
only, right now,
Walmart
ORG
is is in that spot. But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired, pulled off this union vote. What's your message to Like him. Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a junior or not. They always have had that choice and it continues to be their choice and you know, we happen to think they're better off without a union for a number of reasons. Including the fact that, you know, it's it's much harder when you Union to have a direct relationship with your manager Get things done quickly. So, if you see something on the line that you think could be better for Team or you or your or customers Just go to your manager and say let's change it. You know, there's a whole process in in bureaucracy that you have.
So obviously the power
Robots
NORP
. Where is it? No. It's not really widely available for sale. What's I hope you go one. Okay. Thank you. Everyone's very curious about
Jeff
PERSON
's role.
These days
DATE
, what kind of executive chair he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside, it looks like he's Focusing on philanthropy. He's focusing on space. What kind Executive chairman is he?
Jeff
PERSON
is always gonna be involved and he has you know I I'm I feel very lucky to have been in
Amazon
ORG
for
25 years
DATE
I feel very lucky to have worked directly for
Jeff
PERSON
for
20
CARDINAL
of them and we have AA really close relationship and have for a long time and I think we share a lot of same values about customers and how important is to optimize for customers and how high standards they need to be you know given how easy it is for people to switch The importance of invention and speed and so you know I just feel very lucky to have had the chance to work so closely with him. So is your relationship? I mean he was your only boss for
5 years
DATE
, right? Is your relationship To lead different than it was when you were the head of. Yeah. Of course, you know, every single job you have, the relationship is different. You know, remember,
the first couple years
DATE
I work for
Jeff
PERSON
, I work is what we call the shadow then, what's really like achieve the staff That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and and it's different when I'm in the CEO role but you know the constant has always been that we have
Relationship
LOC
and we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer in
the Right now Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired pulled off this union vote what's your message One like him. Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a union or not. They always have had that choice and it continues to be their choice and you know, we happen to think they're better off without a union for a number of reasons. Including the fact that, you know, it's it's much harder when you Union to have a direct relationship with your manager and to get things done quickly. So, if you see something on the line that you think would be better for your your team or you or your or customers, Can't just go to your manager and say, let's change it. You know, there's a whole process in in bureaucracy that you have to Through to be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up weed much rather here from every employee. Whatever is on their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time. You have to Really competitive benefits and then I think if you look at
Amazon
ORG
's they're very unusual in this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
The starting salary is now over $
18
MONEY
an hour which you know Is more than double the federal minimum wage. You get full, health insurance, and
401
CARDINAL
K, and
20 weeks
DATE
,
up to 20 weeks
DATE
of parental leave, and if you wanna get a college education, you haven't had one, we've a career choice Program. The website associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need to You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. What is the mark that you want to make Still.
Fundamentally different than it was when you were the head of Every single job you have, the relationship is different. You know, remember might
the first couple years
DATE
I work for
Jeff
PERSON
, I work is what we call the shadow then what's really like the cheapest staff That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and and it's different when I'm in the CEO role but you know the cost and has always been that we have a great Ship and we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer in the
Second
ORDINAL
only right now
Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses. When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired, pulled off this
un
ORG
What's your message to someone like him? Your message to the folks who think maybe we should join a union. I know, I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a union or not. They always have had that choice and it continues to be their choice and you know, we happen to think they're better off without a union for a number of reasons. Including the fact that, you know, it's it's much harder when you Union to have a direct relationship with your manager and to get things done quickly. So, if you see something on the line that you think could be better for your your team or you or your or customers, Yeah, just go to your manager and say, let's change it. You know, there's a whole process in in bureaucracy that you have to Fruit to be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bringing up and we'd much rather hear from every employee. Whatever is on their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time. You have to Really competitive benefits and then I think if you look at Amazons they're very unusual in this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
The starting salaries now over $
18
MONEY
an hour which you know Is more than double the federal minimum wage.
Four
CARDINAL
health insurance in
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education you haven't had one we've a career choice program that let's our Center associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need to You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously What is the mark that you want to make Still. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. The
FTC
ORG
has revamped its anti trust.
Someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired, pulled off this union vote. What's your message One like him. Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a junior or not. They always have had that choice and it continues to be their choice and you know, we happen to think they're better off without a reunion for a number of reasons. Including the fact that, you know, it's it's much harder when you Union to have a direct relationship with your manager and to get things done quickly. So, if you see something on the line that you think could be better for your your team or you or your or customers, Can't just go to your manager and say let's change it. You know, there's a whole process in in bureaucracy that you have to Through to be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up and we'd much rather hear from every employee. Whatever is on their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time. You have to Really competitive benefits and then I think if you look at
Amazon
ORG
's they're very unusual in this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
The starting salaries now over $
18
MONEY
an hour which you know is is more than double the federal minimum wage. You get full health insurance and
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education, you haven't had one Career choice program that let's our fulfillment center associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our arm please and we need to You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously. What is the mark that you want to make Still. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. Into
Amazon
ORG
and buy some accounts is Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? It's growing as to significant extent like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody you look We will stand up to that scrutiny and I you know I think that's what we've tried to do in running the business. We can't control You know whether organizations bring different suits against us but I think if you look at our business, if you actually look at the fact, if you take out of, you know, take out of the equation that they're they're may not be the most Objective, you know, leadership when it comes to
Amazon
ORG
and that organization If you look at the facts.
You think it'd be better for your your team or you or your or customers you can't just go to your manager and say let's change it you know there's a whole process in in bureaucracy that you have Through to be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up and we'd much rather hear from every employee. On their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time, you have to have really competitive benefits and then, I think if you look at
Amazons
DATE
, they're very unusual in this space. We champion the $
15
MONEY
minimum wage
several years ago
DATE
. Starting salaries now over $
18
MONEY
an hour which you know is is more than double the federal minimum wage. You get full health insurance and
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education, you haven't had
one
CARDINAL
Your choice program that let's our fulfillment center associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make but still
David Weston
PERSON
. Information at insight. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. The
FTC
ORG
has revamped its anti trust inquiry into
Amazon
ORG
and by some accounts is Celebrating it. Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? It's growing. It's too significant like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody look, that we would stand up to that scrutiny and I you know, I think What we tried to do in running the business. We can't control what, you know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at the, if you take out You know take out of the equation that they're they're may not be the most objective you know leadership when it comes to
Amazon
ORG
and that organization if you look at the facts you know in our retail business we're about
one%
ORG
of the worldwide retail market segment And remember
85%
PERCENT
of it is still offline And if you look in our AWS business You know about depending on how you measure it
95%
PERCENT
of the worldwide global IT Span is on premises you know and then we have a cloud business and then we have a portion of that you know we were leading market segment share in the cloud part of this We operate you know who we compete with
NWS
ORG
is really on premises IT in addition to the clouds so you know these are relatively small percentages of Entire pie and you can kinda step through all the businesses and I
We find
David Weston
PERSON
. Yes it's about renewables This is a level of uncertainty that we haven't had to deal with. Television and radio TC as revamped. It's anti trust inquiry into
Amazon
ORG
and by some accounts is Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? If you are a large company, it's growing. It's too significant like we have You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that in mind and knowing that if if somebody look, that we would stand up to that scrutiny and I you know, I think What we tried to do in running the business. We can't control what, you know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at If you take out of you know take out of the equation that they're they're may not be the most objective you know leadership when it comes to
Amazon
ORG
and that organization if you look at the facts you know in our retail business we're about
one%
ORG
of the worldwide retail market segment share and remember
85%
PERCENT
of it is still offline And if you look in our AWS business You know about to be how you measure it
95%
PERCENT
of the worldwide global IT
Spanish
NORP
on premises you know and then we have a cloud business and then we have a portion of that and we were leading market segment share in the cloud part of this We operate, you know, who we compete with is really on premises. IT in addition to the clouds. You know these are relatively small percentages of of the entire pie and you can kinda step through all the businesses and I think simply because you've been successful In a few different businesses doesn't somehow mean that you have a natural market power it just means you've been successful in a couple different Experiences but we still have AA relatively small amount of market segment share in those areas. What about the
SEC
ORG
or being sued by them over
third
ORDINAL
party data and how you used it? Do you think in the past
Amazon
ORG
made mistakes with letting employees inter How those
third
ORDINAL
party
Sally
PERSON
sellers were doing? Pretty good control. I mean, you know, we've course disagree with the premise. Of that, but I would say that we have very good controls with respect to the data that the different employees that are able to see and by the way I think that we can be better for sellers. You know, I I think that We can have better tools from the get started. We give better tools from the manage what they're doing. Across their their different
Amazon
ORG
units. I think we can communicate better. There's a whole bunch of things we can do better. And we agonize over every single email or communication we get from sellers. We do Regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with
Amazon
ORG
and I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what's Sellers don't really long for e-commerce software that exist in lots of places And it is not very expensive what they look
The
FTC
ORG
has revamped its anti trust inquiry into
Amazon
ORG
By some accounts is Tolerating it. Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? If you are a large company, it's growing as to significant extent like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody look, We will stand up to that scrutiny and I you know I think that's what we've tried to do in running the business. We can't control what, you know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at the fact, if you take out You know take out of the equation that they're they're may not be the most objective you know leadership when it comes to
Amazon
ORG
in that organization if you look at the facts You know, in our retail business, we're about
one%
ORG
of the worldwide retail market segment share And remember
85%
PERCENT
of it is still offline and if you look in our AWS business You know about to be how you measure it
95%
PERCENT
of the worldwide global IT Span is on premises you know and then we have a cloud business and then we have a portion of that you know we have a leading market segment share in the Part of this but we operate you know who we compete with
NAWS
ORG
Really on premises IT in addition to the clouds so you know these are relatively small percentages of of the entire pie and you can kinda step through all the businesses and I think simply because you've been successful in a few different businesses doesn't somehow mean that you have a natural market power it just means you've been Won a couple different customer experiences but we still have a relatively small amount of market segment share in those areas. What about the
SEC
ORG
? You're being sued by them over
third
ORDINAL
party data and how you've used it. Do you think in the past
Amazon
ORG
made mistakes with letting employ Internally see how those
third
ORDINAL
party sellers were doing. Pretty good control. I mean, we, you know, we've course disagree with the premise of that but I would say that we have very good controls with respect to the data that the different employees since we're able to see and by the way, I think that we can be better for sellers. You know, I I think that Yeah we can have better tools from the get started we get better tools from the manage what they're doing across their their different
Amazon Units
ORG
. I think we can communicate better. There's a whole bunch of things we can do better. And we agonize over every single email or communication we get from sellers. We do very regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with On and I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what's Sellers don't really For e-commerce software. That exists in lots of places It is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses they're building. So, we have a lot of work to do there like we do in a lot of other places I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, significant issue All sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports and the increase our capacity in getting products in, but I think it's gonna be something that companies battle with for some time You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously The mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well I I don't I don't really think of it that way Emily I mean I I don't think it's really about any jazzy era or anyone person you know and and
You know take out of the equation that they're they're may not be the most objective you know leadership when it comes to amazon and that organization if you look at the facts you know in our retail business we're about
one%
ORG
of the worldwide retail market segment share And remember
85%
PERCENT
of it is still offline And if you look in our AWS business You know about depending on how you measure it
95%
PERCENT
of the worldwide global IT Span is on premises you know and then we have a cloud business and then we have a portion of that and we were leading market segment share in the cloud part of this We operate you know who we compete with
NWS
ORG
is really on premises IT in addition to the clouds so You know, these are relatively small percentages of of the entire pine. You can kinda step through all the businesses and I think simply because you've been successful in a few different businesses, doesn't somehow mean that you have a natural market power. It just means you've been successful in a couple Customer experiences but we still have AA relatively small amount of market segment sharing those areas. What about the
SEC
ORG
or being sued by them over
third
ORDINAL
party data and how you've used it? Do you think in the past
Amazon
ORG
made mistakes with letting employees in How those
third
ORDINAL
party sellers were doing? Pretty good control. I mean, you know, we've course disagree with the premise. Of that, but I would say that we have very good controls with respect to the data that the different employees that are able to see and by the way, I think that we can be better for sellers. You know, I I think We can have better tools from the get started. We give better tools from the manage what they're doing. Across their their different
Amazon Units
ORG
. I think we can communicate better. There's a whole bunch of things we can do better. And we agonize over every single email or communication we get from sellers. We do very regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with And I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what's Sellers don't really long for e-commerce software. That exists in lots of places And it is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses they're building. So, we have a lot of work to do there like we do in a lot of other But I I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, Issue for all sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports and the increase our capacity in getting products in, but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously What is the mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well, I I don't I don't really think of it that way, Emily. I mean, I I don't think it's really about any jazzy era or anyone person, you know, and and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on AWS That is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom and then the number of inventors and people care about customers
Operate
NORP
you know something where it has to work almost like a delta and it's it's always teams and so I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses
85%
PERCENT
of it still lives offline. Oh my god. I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
you know the time I've been there I think it Small compared to
the next 25 years
DATE
. There is a lot for us to include
This is IT in addition to the clouds. So, you know, these are relatively small percentages of of the entire pie and you can kinda step through all the businesses and I think simply because you've been successful In a few different businesses doesn't somehow mean that you have a natural market power. It just means you've been successful in a couple different Experiences but we still have AA relatively small amount of market segment sharing those areas. What about the
SEC
ORG
? You're being sued by them over
third
ORDINAL
party data and how you've used it. Do you think in the past
Amazon
ORG
made mistakes with letting Employees internally see How those
third
ORDINAL
party sellers were doing? Pretty good control. I mean, we, you know, we've course disagree with the premise. Of that, but I would say that we have very good controls with respect to the data that the different employees that are able to see and by the way, I think that we can be better for sellers. You know, I I think You know we can have better tools from to get started we give better tools from the manage what they're doing across their their different
Amazon
ORG
units I think we can communicate better there's a whole bunch of things we can do better and we agonize over every single email or communication we get from sellers and we do Regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with
Amazon
ORG
and I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what's Sellers don't really long for e-commerce software that exist in lots of places And it is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses they're building. So, we have a lot of work to do there like we're doing a lot of other places I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, significant issue All sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports and the, and the increase our capacity in getting products in but I think it's gonna be something that companies battle with for some time You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well, I I don't I don't really think of it that way, Emily. I mean, I I don't think it's really about any jazzier or anyone person, you know, and and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on AWS That is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom. And then the number of inventors and people care about customers
Operate
NORP
you know something where it has to work almost like a delta. It's it's always teams. And so I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses
85%
PERCENT
of it still lives offline. Oh my god. I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
, you know, the time I've been there, I think It's gonna work small compared to
the next 25 years
DATE
. There is a lot for us to invent on behalf of customers. So, you know, I'm excited to be part of the team. It makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we have a responsibility to do that and so you know it's it's it's a long journey and that we're working on but I'm excited to be part of it and you know, I For a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you.
Sellers don't really Or e-commerce software. That exists in lots of places It is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses So we have a lot of work to do there like we do in a lot of other places but I I think we are very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, significant For all sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports and increase our capacity in getting products in, but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously What is the mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era? Well, I I don't I don't really think of it that way, Emily. I mean, I I don't think it's really about any jazzy era or anyone person, you know, and and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on AWS That is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom. And then the number of inventors and people care about customers
Operate
NORP
you know something where it has to work almost like a downtown it's it's always teams and so I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses
85%
PERCENT
of it still lives offline. Oh my god, I think we have a lot of upside, a lot of growth, and I think as much invention as we've seen
Last 25 years
DATE
you know the time I've been there I think it Small compared to
the next 25 years
DATE
. There is a lot for us to invent on behalf of customers and so, you know, I'm excited to be part of the team that makes it happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we were responsibly do that and so you know it's it's it's a long journey that we're working on but I'm excited to be part of it and you know I
Order
PERSON
for a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you. Thank you. In
the coming months
DATE
. From. Moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority.
Well, I I don't I don't really think of it that way, Emily. I mean, I I don't think it's really about an
Andy Jassie
PERSON
era or anyone person. You know, and and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on AWS That is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom. And then the number of inventors and people care about customer Operate, you know, something where it has to work almost like a downtown. It's it's always teams and so, I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses Five% of it still lives offline. Oh my god. I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
, you know, the time I've been there, I think Gonna work small compared to
the next 25 years
DATE
. There is a lot for us to invent on behalf of customers. So, you know, I'm excited to be part of the team that makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we were responsibly do that and so, you know, it's it's it's a long journey and that we're working on but I'm I'm excited to be part of it and you know, For a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority.
Ken Griffin
PERSON
is moving both sit it out and send it all security is to
Miami
GPE
let's go was broken by
Bloomberg
PERSON
's Why did the biggest names in business choose
Bloomberg
PERSON
? That is a great question. It's a great question. Great question. I'm glad you asked that. Know how to maneuver the machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
Up to 7 days
DATE
in advance if you're satellite's gonna come dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem.
Invention is we've seen
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DATE
, you know, the time I've been there, I think it Looks small compared to
the next 25 years
DATE
. There is a lot for us to invent. On behalf of customers and so, you know, I'm excited to be part of the team that makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we have a responsibility do that and so you know it's it's it's a long journey that we're working on but I'm excited to be part of it and you know Departed for a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you.
Andy Jackie
PERSON
,
Sarah Vanathan
PERSON
. Do you see that? The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority.
Bloomberg She's
PERSON
a great question. Great question. A lot of the satellites have propulsion systems. They can kinda move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If your satelli Satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a clouded debris and now all the other satellites are flying through this whizzing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up You're watching the best of the cutter economic
No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming true
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. That is a great question. Great question. I'm glad you asked that. Know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert To
7 days
DATE
in advance if your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've installed so much more hardware in the space. But you have a big collision that creates a clouded debris and now all the other satellites are flying through this whizzing mess of debris as we add all of the new satellites into space. The risks of the collision, the likelihood of the collisions going up. You're watching the best of the cutter economic forum. I manage cranny in
Doha
GPE
. This
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of state to tackle some of the world's most pressing challenges from small supply chains and escalating inflation to
Russia
GPE
's military assault on
Ukraine
GPE
Over
the next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with it on musk the world's richest person spoke to
Bloomberg
ORG
's editor in Chief
John Mick
PERSON
His head kind plans at Tesla why he thinks a recession is inevitable Course is ongoing bid for
Twitter
PRODUCT
.
Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
Why did the biggest names in business choose
Bloomberg
PERSON
? It's a great question. Hey Hey Facebook Know how to maneuver the machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in If your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving satellites around but So much more hardware in the space. Are you have a big collision that creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up You're watching the best of the cutter economic forum I manage cranny in
Doha
GPE
this
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of states to tackle some of the world's most pressing challenges from small supply chains and escalating inflation to
Russia
GPE
's military assault on
Ukraine
GPE
Over
the next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with
Elon Musk
PERSON
the world's richest person spoke to
Bloomberg
ORG
's editor in Chief
John McAthweight
PERSON
about his head kind plans at Tesla why you thinks a recession Is inevitable. With respect to the the
Twitter
PERSON
transaction there's a limit to what I can say publicly given that is someone would have sensitive matter Measured in my responses here. Is not to generate incremental lawsuits Hey Facebook please
Times
ORG
managed to overcome Yes I think importance. So Given you enough information. Well there are still a few unresolved matters you've you've probably read about the the question as to whether the number of fake and spam users on the system is less than five% as
Twitter
PERSON
claims which I think is probably not most people's experience I'm reusing
Twitter
PRODUCT
. So we're still waiting resolution on that matter. And that is a very significant matter. So We're waiting on that. And then of course, there is the question of will the the deck portion of the round, come together, and then will the
Sheryl
ORG
's vote in favor. So, I think those are the
three
CARDINAL
things that stand in the You know if that needs to be resolved before the trans Wait. What about the general state of the economy? Does that weigh on you when you think about this? I mean you just described it. You have a super bad feeling about the economy. Are you still in that position? I've just set you earlier.
Joe Biden
PERSON
Has just come out.
Dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up You're watching the best of the cutter economic forum I manage cranny in
Doha
GPE
this
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of states to tackle some of the world's most pressing challenges from small supply chains and escalating inflation to
Russia
GPE
's military assault on
Ukraine
GPE
Over
the next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with it on musk
World
ORG
's richest person spoke to
Bloomberg
ORG
's editor in chief
John McElth Waite
PERSON
about his head kind plans at Tesla why you thinks a recession is inevitable With respect to the the
Twitter
PERSON
transaction there's a limit to what I can say publicly given that is someone with a sensitive matter So, To be measured in my responses here. Lawsuits Sometimes managed to overcome Yes, if that position minimization is I think important. Have you so have
Twitter
PERSON
given you enough information? Well there are still a few unresolved matters you've you've probably read about the the question as to whether Number of fake and spam users on the system is less than five% as to reclaims. Which I think is probably not most people's experience. On when using
Twitter
PRODUCT
. So we're still waiting resolution on that matter and that is a very significant matter. So We're we're waiting resolution on that. And then of course there is the question of will the the deck portion of the round come together and then will the shareholders vote in favor. So I think those are the
three
CARDINAL
things that stand in the You know if that needs to be resolved before the trans Wait. What about the general state of the economy? Does that weigh on you when you think about this? I mean you just described it. You have a super bad feeling about the economy. Are you still in that position? I've just said you earlier.
Joe Biden
PERSON
Has just come out and said that
America
GPE
is not inevitable. How do you feel about the economy? Some point. Asked whether there is a reception in the near term I think that is more likely than not. It certainly isn't. It's not a certainty but It appears more likely than not What do you think I'm I'm I'm I'm with you. I think it's more likely
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PRODUCT
thing to do with the
Twitter
PERSON
bid which is you know you are one of the And fastest growing investors in
China
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Twitter
PRODUCT
that kind of public forum for free speech. The
Chinese
NORP
historically don't tend to be very enthusiastic about free speech are you worried Out whether you can keep those
two
CARDINAL
particular horses running Is buying
Twitter
PRODUCT
gonna get you in trouble with the
Chinese
NORP
? Well
Twitter
PERSON
does not operate in
You watching the best of the cutter economic forum I manage cranny in
Doha
GPE
this
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of state to tackle some of the world's most pressing challenges from small supply chains and escalating inflation to
Russia
GPE
's military
Salt
GPE
on
Ukraine
GPE
. Over
the next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with
Elon Musk
PERSON
the world's richest person spoke to
Bloomberg
ORG
's editor in Chief
John McAthweight
PERSON
about his head kind plans at Tesla why he thinks a recession is inevitable and of course it's With respect to the the
Twitter
PERSON
transaction there's a limit to what I can say publicly given that is someone of a sensitive matter So, I would like to be measured in my responses here. Is not to generate incremental lawsuits. Hey Facebook Sometimes managed to overcome Yes, it it that position minimization is I think important. Have you so have
Twitter
PERSON
given you enough information? Well there are still
Result
PERSON
matters you you probably read about the the question as to whether Number of fake and spam users on the system is less than five% as
Twitter
PERSON
claims. Which I think is probably not most people's experience. On reusing
Twitter
PRODUCT
. So we're still waiting resolution on that matter. And that that is a very significant matter. So We're waiting on that. And then of course there is the question of will the the death portion of the round come together and then will the shareholders vote in favor. So I think those are the
three
CARDINAL
things that stand in the You know, if that needs to be resolved before the trans Hey Facebook wait. What about the general state of the economy? Does that weigh on you when you think about this? I mean you just described it. You have a super bad feeling about the economy. Are you still in that position? I've just set you earlier.
Joe Biden
PERSON
has just come out and said that A recession in
America
GPE
is not inevitable. How do you feel about the economy Well I think it recession is inevitable at some point. Best weather there is a reception in the near term I think that is more likely than not. It's it certainly isn't this. It's not a certainty but Appears more likely than not. And what do you think I'm I'm I'm I'm with you. Which is you know you are one of the
Western
NORP
fastest growing investors in
China
GPE
Tesla you've talked about it being a third Free speech. The
Chinese
NORP
historically don't tend to be very enthusiastic about free speech are you worried About whether you can keep those
two
CARDINAL
particular horses running is is buying
Twitter
PRODUCT
gonna get you in trouble with the
Chinese
NORP
Well
Twitter
PERSON
does not operate in
China
GPE
so And I think
China
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is not a temporary Free speech of the press in the
US
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. Is that communicating via video is not a fad that we are using in all aspects of our lives for work or learning for communicating for staying in touch.
Bloomberg
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has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists.
If if oil prices will continue this rent Food prices continue to this trend And the other central banks will increase interest further Particular is at you know we may start to see in addition to what we have seen until now more interruption to trade more interruption to supply chain If you are talking about
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Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution.
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economy to grow and high cost of financing it will be a problem for the industrial for the For the economy but eventually infilation is a core business inflation control is part of the core business for central bank of Egypt. Up next the deputy chairman and CEO of
the Kui Patrolium Corporation
ORG
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Ukraine
GPE
has put in the oil prices. This is
Bloombad
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Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good ambassador I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest invest The people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Energy was of course the major theme of
the week
DATE
and the deputy chair and CEO of
the Kuai Patrolium Corporation
ORG
told us he thinks the war in
Ukraine
GPE
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the next 18 months
DATE
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Center Bank of Egypt
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Ukraine
GPE
has put in the oil prices. This is
Blue Bad
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Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need. When you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor? I tell them it's the surround yourself with and work with the best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest investors in the world People that I would like to have managing my money. Revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. How important energy is to the world. Rackings the conflict has put a
$30
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Francine Laquar
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the next 18 months
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Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest The people that i would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Energy was of course the major theme of
the week
DATE
and the deputy chair and CEO of
the Kuai Patrolium Corporation
ORG
told us he thinks the war in
Ukraine
GPE
has only highlighted how important energy is to the world Premium into the oil market. It caught up with my colleague
Francine Laquar
PERSON
. We think that oil is there for the long term in terms of even an idiot energy transition. So We may be concerned about what what obviously
the next 18 months
DATE
is gonna do for financing and and for our cash Good enough prices for us. Yes the war in
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KPC
ORG
we look at the long term so we're investing right through the cycle but companies that that don't do that are are putting in more investment right now The question right now is really about the cash cost Of of those investments with inflation and and steel prices and whatnot. Yeah. Going through the roof. It's going to be an issue. And the energy price is so high right now. I see AA war premium of
about $30
MONEY
in the current price right now that but for the war and in
Ukraine
GPE
you'd probably be seeing
About $89
MONEY
barrel oil which is not that high. Over the past it's it's actually you know it takes you back to the the last thing that we had so it's
Lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Energy was of course the major theme of
the week
DATE
and the deputy chair and CEO of
the Kuai Patrolium Corporation
ORG
told us he thinks the war in
Ukraine
GPE
has only highlighted how important energy is to the world Premium into the oil market. It got up with my colleague
Franci Laquar
PERSON
. We think that oil is there for the long term in terms of even an idiot energy transition. So We maybe concerned about what what obviously
the next 18 months
DATE
is gonna do for financing and and for our cash balances but over Term we're quite confident that oil were remained at at stable and and good enough prices for us. How does a short term? Yeah. The war in
Ukraine
GPE
. Of course, what we're seeing with COVID changed the energy transition. So, the
AIA
ORG
said look Does that get pushed back? No you have to you have to keep an eye on that as well but the Mistake that a lot of us had a lot of people have made Before the the Ukraine war was to say this is gonna be a war against fossil fuels and that we must stop oil production. Well, the world is using more carbon Next to all the humanitarian issues that come with it. Shows you that energy is required to fuel the future and hydrocarbons have AA big role Storage using carbon as EOR processes or really abating the carbon footprint of the oil barrel. We're in
Kuwait
GPE
and In cash cost And carbon footprint. Now, we need to stay there. That's gonna require a lot of investment. Investment in the short term or no. Continued investment. That is
spring
DATE
investment. Overtime you're seeing a lot of us also continuing to to to produce now
four four
CARDINAL
companies like
KPC
ORG
we look at the long term so we're investing right through the cycle but Companies that that don't do that are are putting in more investment right now. The cash, the game, the the question right now is really about the cash cost of of those investments with inflation and and steel prices and whatnot. Yeah. Going through the roof. It's going to be an issue. With the oil price and the energy price is so high right now. Use prices to stabilize. I see AA war premium of
about $30
MONEY
in the current price right now that but for the war and and
Ukraine
GPE
you'd probably be seeing
About $89
MONEY
barrel oil which is not that high. Over
the past month
DATE
that we had so somewhere in the Which is still comfortable. Economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
. And it continued to go down. So, oil prices, yes, they do impact Economic growth to a certain type of Do you see any demand destruction in our conversation Anywhere. We're getting And some cases a little bit more. Up next
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation this is
Bloomberg
PERSON
.
Oil is there for the long term in terms of even any energy transition. So We may be concerned about what what obviously
the next 18 months
DATE
is gonna do for financing and and for our cash Stable and good enough prices for Yes. Of course what we're seeing with COVID change the energy transition so the AA said look we have to start with Does that get pushed back? As well but the Mistake that a lot of us a lot of people have made before the the Ukraine war was to say this is gonna be a war against fossil fuels and that we must stop oil production. Well, the world is using more carbon now than it ever And this crisis in in
Ukraine
GPE
All the humanitarian issues that come with it And hydrocarbons have AA big role to play now can we make the hydrocarbons cleaner and and more efficient absolutely that's how what we're trying to do Carbon Or really abating the carbon footprint of the oil barrel. We're in
Kuwait
GPE
and I mentioned this earlier that I weird
Kuwait
GPE
at the lowest end of the cost curve both in cash cost and carbon footprint. Now, we need to stay there. That's gonna require a lot of investment. See more investment in the short term or no. Continued investment. And you're seeing
US
GPE
production going up overtime. You're seeing a lot of us. Also continuing to to to produce now
four four
CARDINAL
companies like
KPC
ORG
. We look at the long term so we're investing right through But companies that that don't do that are are putting in more investment right now the question right now is really about the cash cost of of those investments withinflation and and steel prices and whatnot. Yeah. Going through the roof. It's going to be an issue. With the oil price and the energy price is so high right now. Speaking these prices to stabilize I see AA war premium of
about $30
MONEY
in the current price right now that but for the war and in
Ukraine
GPE
you'd probably be seeing
Barrel
PERSON
oil which is not that high. Over the past Talk to the the last big bump that we had so somewhere in the $
67
MONEY
range which is still comfortable. The energy intensity of the world economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
. And it's continued to go down. So since I put the the The size of that impact has has diminished incorrectly. In our conversation we're the best We're getting Calls from our customers say demanding the same amount of oil in some cases a little bit more. Up next
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation this is
Bloomberg
PERSON
. I'm
David Weston
PERSON
. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio.
It's just bad. Investment in the short term or no. He continued investment. I mean, prices where they are, that is spring investment. You're seeing some Overtime you're seeing a lot of us also continuing to to produce now
four four
CARDINAL
companies like
KPC
ORG
we look at the long term so we're investing right through the cycle but companies that that don't do that are are putting in more investment right now Right now is really about the cash cost Of of those investments with inflation and and steel prices and whatnot. Yeah. Going through the roof. It's going to be an issue. But the oil price and the energy price is so high right now. I see AA war premium of
about $30
MONEY
in the current price right now that but for the war and and
Ukraine
GPE
you'd probably be seeing
About $89
MONEY
barrel oil which is not that high. And that is adjusted for inflation over
the past three
DATE
it's it's actually you know it takes you back to the the last thing that we had so it's somewhere in Which is still comfortable. City of the world economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
and it continued to go down so oil prices yes they do impact Economic growth. The
Alright
ORG
. The size of that impact has has diminished. I haven't yet seen demands The same calls from our customers say demanding the same amount of oil and some cases of a little bit more. Up next
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation this is
Bloomberg
PERSON
. I'm
David Weston
PERSON
. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio
Months
DATE
do you see that coming true Moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. Welcome back to the secretary
Steven Mnuchin
PERSON
says inflation in the
US
GPE
can be brought under control if energy prices settle down and
the federal reserve
ORG
follows through on its pledge to continue raising interest rates I do have a lot of confidence in in chair power by the way it's fun I can now talk about the
fed
ORG
I wasn't allowed to talk about
fed
ORG
policy for many years you you know I I guess my my most important advice to the administration is don't do anything to shock the economy They had been talking about raising taxes. They had been talking about making different changes. Not now is not
Over
the past month
DATE
that we had so it's somewhere in the $
67
MONEY
range which is still comfortable. The energy intensity of the world economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
. And it's continued to go down Oil prices yes they do impact Economic growth. The
Alright
ORG
. The size of that impact has has diminished incredible. Would you see any demand destruction in our conversation? Anywhere. I haven't yet seen the structure. We're getting Calls from our customers say demanding the same amount of oil and some cases a little bit more.
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation. This is
Bloomberg
PERSON
. I'm
David Weston
PERSON
. We think that's the next secular shift from businesses most influential and instrumental. This is a level of uncertainty that we haven't had to deal with. No one covers the world like
Bloomberg
PERSON
. Do you see that coming Where are the job cuts to come from?
24 hours
TIME
a day.
Bloomberg
PERSON
. Welcome back to the Says inflation in the
US
GPE
can be brought under control I do have a lot of confidence in in
Chara Powell
PERSON
by the way it's fun I can now talk about the
fed
ORG
I wasn't allowed to talk about
Fed
ORG
policy for
many years
DATE
you know I I guess my my most
Advice
GPE
to the administration is don't do anything to shock the economy So they had been talking about raising taxes. They had been talking about making different changes. Not now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit but this is really now the federal resource job and the administration needs to Careful not to get in the way. I do think, you know, the number
one
CARDINAL
thing the administration can do and I think it's not just them. It's obviously otherworld leaders is we need to find a political solution to this war. A military solution alone Not going to be what stops this. You have confidence in chairman
Powell
PERSON
and you know well. Having worked together And other members of
the federal reserve
ORG
. The reality, however, is that financial markets aren't certain whether they have confidence in chairman
Powell
PERSON
There's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough
Said
PERSON
lost credibility with it's Perspective on inflation that it was transitory
two
CARDINAL
questions Do you think that
the federal reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world Hey.
Up next
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation this is
Bloomberg
PERSON
. Wall St. From businesses most influential and instrumental. This is a level of uncertainty that we haven't had to deal with. Television and radio No one covers the world like
Bloomberg
PERSON
. In
the coming months
DATE
do you see that coming
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. Welcome back to the best of
Carter Economic Forum
ORG
former
Treasury
ORG
Secretary
Steven Manuchin
PERSON
says inflation in the
US
GPE
can be brought onto control Follows through on its pledge to continue raising interest rates. He spoke to
Bloomberg
PERSON
's
Eric Shatska
PERSON
. I do have a lot of confidence in in chairpower. By the way, it's fun. I can now talk about the
fed
ORG
. I wasn't allowed to talk about
fed
ORG
policy for
many years
DATE
. You know, I I guess my my most
Advice
GPE
to the administration is don't do anything to shock the economy So they had been talking about raising taxes. They had been talking about making different changes. Not now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit but this is really now the federal resource job and the administration needs to be Careful not to get in the way. I do think you know the number
one
CARDINAL
thing the administration can do And I think it's not just them it's obviously other world leaders is we need to find a political solution To this war. A military solution alone Not going to be what stops this You have confidence in chairman
Powell
PERSON
and you know well. Having worked together The reality however is that financial markets aren't certain whether they have confidence in chairman
Powell
PERSON
There's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough and the
fed
ORG
lost credibility with its Inflation that it was transitory
Two
CARDINAL
questions Think that the federal reserve needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And What will it take to restore that last credibility Well let me just say it wasn't just the federal reserve the administration also Was talking about inflation would be under control. So, you know, I think from the
Fed
ORG
stamp point Hindsight they clearly waited too long but having said that when your managing the economy near the federal reserve I think you have to balance both sides of that equation I don't buy that the
Fed
ORG
has lost credibility I think the fact that the
Fed
ORG
moved in
75
CARDINAL
basis points which The go is not what the market expected I think chairpower is now signal another
75
CARDINAL
basis points I think if you look at the dots which I never was a big fan of these dogs
Replays
all weekend
DATE
on
bloomberg
PERSON
television and radio No one covers the world like
Bloomberg
PERSON
. In
the coming months
DATE
do you see that coming We will not just cut Resources The moment news breaks
24 hours
TIME
a day. Says inflation in the
US
GPE
can be brought onto control Follows through on its pledge to continue raising interest rates. He spoke to
Bloomberg
PERSON
's
Eric Shatska
PERSON
. I do have a lot of confidence in in chair power. By the way, it's fun I can now talk about the
fed
ORG
. I wasn't allowed to talk about
Fed
ORG
policy for
many years
DATE
. You know, I I guess my my most
Advice
GPE
to the administration is don't do anything to shock the economy So they had been talking about raising taxes. They had been talking about making different changes. Not now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit. But this is really now the federal resource job and the administration needs to be Not to get in the way. I do think, you know, the number
one
CARDINAL
thing the administration can do And I think it's not just them it's obviously other world leaders is we need to find a political solution To this war. Military solution alone Not going to be what stops this. You have confidence in chairman
Powell
PERSON
whom you know well Having worked together with him and other members of
the Federal Reserve
ORG
. The reality, however, is that financial markets aren't certain whether they have confidence in chairman
Powell
PERSON
. There's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough and the
fed
ORG
lost credibility with its On inflation that it was transitory
Two
CARDINAL
questions Think that
the Federal Reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And Will it take to restore that last credibility Well, let me just say it wasn't just the federal reserve. The administration also Was talking about inflation would be under control. So, you know, I think from the
Fed
ORG
stamp point Hindsight they clearly waited too long but having said that when your managing the economy near the federal reserve I think you have to balance both sides of that equation I don't buy that the
Fed
ORG
has lost credibility I think the fact that the
fed
ORG
moved in
75
CARDINAL
basis points which
Ago
PERSON
is not what the market expected. I think chair power is now signaled. Another
75
CARDINAL
basis points. I think if you look at the dot plots which I never was a big fan of these dot plots but that's another story. You know, I think the market understands that expectations are the
fed
ORG
is the feds gonna raise rights. I think the portfolio is just as important and they're they're beginning to slow There. You know, look,
a year ago
DATE
, I said, we're gonna have
10 year
DATE
treasuries
three to three and a half percent
CARDINAL
and people fought that was really high. We basically have
ten-year
DATE
treasures at
three to three and a half percent
CARDINAL
. If the market really didn't have credibility in the
fed
ORG
, interest rate, the long end would be a lot hot In the desk. Economic forum.
Thing to shock the economy So they had been talking about raising taxes. They had been talking about making different changes. Not now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit. But this is really now the federal resource job and the administration needs to Careful not to get in the way. I do think, you know, the number
one
CARDINAL
thing the administration can do and I think it's not just them. It's obviously other world leaders is we need to find a political solution to this war. A military solution alone Not going to be what stops this You have confidence in chairman
Powell
PERSON
and you know well. Having worked together And other members of
the federal reserve
ORG
. The reality, however, is that financial markets aren't certain whether they have confidence in chairman
Powell
PERSON
. There's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough and the
fed
ORG
lost credibility with its Perspective on inflation that it was transitory
two
CARDINAL
questions Do you think that
the Federal Reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And What will it take to restore that last credibility Well let me just say it wasn't just the federal reserve the administration also Was talking about inflation would be under control. So, you know, I think from the
Fed
ORG
stamp point In hindsight they clearly waited too long Having said that when you're managing the economy near the federal reserve I think you have to balance both sides of that equation I don't buy that the
Fed
ORG
has lost credibility I think the fact that the
Fed
ORG
moved in
75
CARDINAL
basis points which
a month ago
DATE
is not Market expected. I think chairpower is now signaled. Another
75
CARDINAL
basis points. I think if you look at the dot plots which I never was a big fan of these dog plots but that's another story You know I think the market understands that expectations are the the feds gonna raise rights. I think the portfolio is just as important and there there beginning to slow that down. You know look
a year ago
DATE
I said we're gonna have
10 year
DATE
treasuries
three to three
CARDINAL
And people thought that was really high we basically have
10 year
DATE
treasures at
three to three and a half percent
CARDINAL
If the market really didn't have credibility in the federal the long end would be a lot hotter than it is. And the CEO of the He thinks that even if you're enters one, he still bullish on the region. To my colleague We could go into a recession in some part of the world maybe in
Europe
LOC
I had commented that we might go on to our recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review on
Europe
LOC
and
General Island
LOC
a long term
Europe
LOC
as a destination of a lot of talent They have a very good education system It's a tourist ticket destination as well And they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over any other you know countries So It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is is
Europe
LOC
at the Your biggest worry but also your biggest opportunity. If you look at the part of cash, how much you wanna put in
Europe
LOC
compared to other regions in the world? See from
from 2018
DATE
, once we have announce our strategy, we we were very vocal about our concentration in
Europe
LOC
. Yeah. And at the same time we have said that we will not be stopping and resting in
Europe
LOC
. We will be very selective But we are going full speed and and the
US
GPE
market and
Asia
LOC
. We have a you know other friends I said
Do you think that
the Federal Reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And What will it take to restore that last credibility Well let me just say it wasn't just the federal reserve the administration also Was talking about inflation would be under control. So, you know, I think from the
Fed
ORG
standpoint Hindsight they clearly waited too long but having said that when you're managing the economy near
the Federal Reserve
ORG
I think you have to balance both sides of that equation I don't buy that the
Fed
ORG
has lost credibility I think the fact that the
Fed
ORG
moved in
75
CARDINAL
basis points which The go is not what the market expected. I think chair power is now signaled. Another
75
CARDINAL
basis points. I think if you look@the. Plot which I never was a big fan of these dot plots but that's another story. You know, I think the market understands that The
fed
ORG
's gonna raise rights. I think the portfolio is just as important and there there beginning to slow that down. You know, look,
a year ago
DATE
, I said, we're gonna have
10 year
DATE
treasuries,
three to three and a half percent
CARDINAL
and people fought that was really high. We basically have
10 year
DATE
treasures To
three and a half percent
DATE
. If the market really didn't have credibility in the
fed
ORG
, interest rate, the long end would be a lot hotter than it is. Enters one he still bullish on the region
Mansour Ben
PERSON
Ibrahim
Al Mahmud
PERSON
To my colleague
Franci Laquar
PERSON
. We could go into a recession in some part of the world maybe in
Europe
LOC
I had commented that we might go into a recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review in
Europe
LOC
and General in the long term
Europe
LOC
as a destination of a lot of talent They have a very good education system It's a tourist ecstatic destination as well And and they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over any other you know countries So It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is is
Europe
LOC
at the moment that your biggest But also your biggest opportunity if you look at the part of cash how much you wanna put in
Europe
LOC
compared to other regions in the world see from from
2018
DATE
once we have an answer or strategy we we were very vocal about our concentration in
Europe
LOC
no And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we are going for the speed and and the
US
GPE
market and
Asia
LOC
. We have a, you know, other friends I said to location of geographies and we would like to To reach a proper location between the geographies But again,
Europe
LOC
, we will, we will not stop investing. We will continue investing. Where I have, I wasn't in
Europe
LOC
recently and I'm meeting and I have noticed a lot of activities and technology space In
Europe
LOC
. I I think at some point you're looking for assets, infrastructure, assets in
Africa
LOC
, is it still the case? Yeah, of course, I've been if we can deploy more and have we can and for a structure would be a fantastic. We have been investing in renewables as well and and
Africa
LOC
. And we would like to do more. It's a little bit than a slower pace and other you know a countries We are trying to find our partner to deploy more in
Africa
LOC
. Anything with
Russia
GPE
so you you haven't a non I mean actually AA pretty sizable and considerable assets in rush hour what will happen to them Status quo. We are not investing more in
Russia
GPE
. At the same time to be practical. You cannot take
I think chairpower is now signal. Another
75
CARDINAL
basis points. I think if you look at the dot plots which I never was a big fan of these dot plots but that's another story You know I think the market understands that expectations The
fed
ORG
's gonna raise rates I think the portfolio is just as important and they're they're beginning to slow that down you know look
a year ago
DATE
I said we're gonna have
10 year
DATE
treasuries
three to three and a half percent
CARDINAL
and people fought that was really high we basically have
10 year
DATE
treasures at
three
CARDINAL
to If the market really didn't have credibility in the
fed
ORG
, interest rate, the long end would be a lot hotter than it is. Even if
Europe
LOC
enters one he still bullish on the region
Mantua
NORP
been
Ibrahim Al Mahmud
PERSON
spoke to my colleague We could go into a session in some part of the world maybe in
Europe
LOC
I had commented that we might go onto our recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review on
Europe
LOC
and General in the long term.
Europe
LOC
as a destination of a lot of talent They have a very good education system It's a tourist ticket destination as well And they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over Any other you know countries. It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is is your about the moment that your biggest Worry but also your biggest opportunity if you look at the part of cash how much you wanna put in
Europe
LOC
compared to other regions in the world see from from
2018
DATE
once we have an answer or strategy we we were very vocal about our concentration in
Europe
LOC
And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we are going full speed and and the
US
GPE
market and
Asia
LOC
We have a you know other friends
Location
ORG
and term of geographies and we would like to To reach a proper location between the geographies Again
Europe
LOC
we will we'll not stop investing. We will continue investing. We have I wasn't in
Europe
LOC
recently and I'm meeting and I have noticed a lot of activities and technologies based In
Europe
LOC
. I I think at some point you're looking for assets, infrastructure, assets, and
Africa
LOC
. Is it still the case? Yeah, of course, I've been if we can deploy more in
African
NORP
and for a structure would be a fantastic. We have been investing and renewables as well and and
Africa
LOC
. And we would like to do more. It's it's a little bit than a slower pace and other you know a countries But we are trying to find our partner to deploy more in
Africa
LOC
. Anything with
Russia
GPE
so you you haven't a non I mean actually AA pretty sizable and considerable assets in
Russia
GPE
what will happen to them Still status quo we are not investing more in
Russia
GPE
at the same time to be practical you cannot exit I know some some companies have announced to to exit it but and a reality they couldn't We are monitoring the situation in
Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are And bidding any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of
Ukraine
GPE
Are you in touch with the
Russian
NORP
government about some of these assets? Naturally right now but but you know we have a big a big investment in
Rosener
PERSON
as you know
Rosenth
ORG
itself is not undersanction. Of course we have a fiduciary to our future generation of course we will be in
The long end would be a lot hotter than it is. Even if
Europe
LOC
enters one he still bullish on the region
Mansour Ben Ibrahim Al Mahud
PERSON
spoke We could go into a recession in some part of the world maybe in
Europe
LOC
I had commented that we might go into a recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review in
Europe
LOC
and General in the long term
Europe
LOC
as a destination of a lot of talent They have a very good education system It's a tourist ecstatic destination as well And and they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over any other you know countries So It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is is
Europe
LOC
at the moment that your biggest But also your biggest opportunity if you look at the part of cash how much you wanna put in
Europe
LOC
compared to other regions in the world see from from
2018
DATE
once we have an answer or strategy we we were very vocal about our concentration in
Europe
LOC
no And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we are going for the speed and and the
US
GPE
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Asia
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. We have a, you know, other friends I set a location and term of geographies and we would like to To reach a proper location between the geographies But again,
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, we will, we will not stop investing. We will continue investing. Where I have, I wasn't in
Europe
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recently and I'm meeting and I have noticed a lot of activities and technology space In
Europe
LOC
. I I think at some point you're looking for assets, infrastructure, assets in
Africa
LOC
, is it still the case? Yeah, of course, I've been if we can deploy more in
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Africa
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. Anything with
Russia
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so you you haven't a non I mean actually AA pretty sizable and considerable assets in
Russia
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what will happen to them? Status quo. We are not investing more in
Russia
GPE
. At the same time to be practical. You cannot exit. I know some some companies have announced to to exit it but and a reality they couldn't. We are monitoring the situation in
Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are And bidding any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of
Ukraine
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itself is not under sanction. Of course we have a fiduciary
2 hour
TIME
future generation of course we will be in touch of them for for the dividends that we we deserve. But any further investment now What do you do with crypto right now so it was I mean it's up it's down depends on stable coins or or other ones are you interested Cause? No, trip to now. A blockchain yes. We have very clear review on this and and our team and and the technology space are exploring opportunities and the blockchain. And that's all from the counter economic forum right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles. The destination,
Bloomberg
PERSON
. Com.
We're going full speed and and the
US
GPE
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Asia
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Europe
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Europe
LOC
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Europe
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. I think at some point you're looking for assets infrastructure acids in
Africa
LOC
is it still the case yeah of course I've been if we can deploy more and if we can and for
Australia
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Africa
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Africa
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Russia
GPE
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Russia
GPE
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Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are And bidding any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of your crime. Are you in touch with the
Russian
NORP
government about some of these assets? Really right now but but you know we have a big a big investment in
Rosener
PERSON
as you know
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itself it's not undersanction Of course we have a fiduciary to our future generation of course we will be in touch of them for for the dividends that we we deserve. But any further investment now What do you do with crypto right now? So it was I mean it's up. It's down. Depends on stable coins or or other ones. Are you interested? So nice at class? No. Trip to now. A blockchain yes We have very clear review on this and and our team and and the technology space are exploring opportunities in the blockchain. And that's all from the cutter economic forum right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles, the destination,
Bloomberg
PERSON
. Com. This is
Bloomberg Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find.
Happened to them? Status quo we are not investing more in
Russia
GPE
at the same time to be practical you cannot exit I know some some companies have announced to to exit it but an an reality they couldn't We are monitoring the situation in
Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are And bidding any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of
Ukraine
GPE
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Russian
NORP
government about some of these assets? Naturally right now but but you know we have a big a big investment in
Rosenette
ORG
as you know
Rosenth
ORG
itself is not undersanction Of course we have a fiduciary to our future to generation of course we will be in touch of them for for the dividends that we we deserve. But any further investment now What do you do with crypto right now so it was I mean it's up it's down depends on stable coins or or other ones are you interested at something as a class no trip to now A blockchain yes We have very clear view on this and and our team and and the technology space are exploring opportunities in the blockchain. And that's all from the cutter economic forum right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles, the destination,
Bloomberg
PERSON
. Com. This is
Bloomberg Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Yes it's about renewables This is a level of uncertainty that we haven't had to deal with. Television and radio.
It's not intersanction Of course we have a fiduciary
2 hour
TIME
future generation of course we will be in touch of them for for the dividends that we we deserve. But any further investment now What do you do with crypto right now? So, it was, I mean, it's up, it's down, depends on stable coins or or other ones. Are you interested? So nice at class? No, trip to No. A blockchain yes We have very clear review on this and and our team and and the technology space are exploring a opportunities in the blockchain. And that's all from the counter economic forum right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles, the destination,
Bloomberg
PERSON
. Com. This is
Bloomberg Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need. When you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world Have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Yes it's about renewables This is a level of uncertainty that we haven't had to deal with.
Bloomberg
PERSON
television and radio. Inflation is a terrible thing. Inflation you could tower.
Rainfall
GPE
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in an everything boat. Hi
Eric Shatzker
PERSON
and welcome to
Bloomberg
PERSON
's Front Row
today
DATE
i'm talking to
Jean Hines
PERSON
the CEO of
Wellington Management Boston
ORG
based
Wellington
GPE
is
one
CARDINAL
of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments but It's a private partnership. The firm has been shrouded in mystery.
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. She says.
Economic forum right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles, the destination,
Bloomberg
PERSON
. Com. This is
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials People. Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. This is We think that's the next secular shift from businesses most Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio Deflation is a terrible thing. Inflation you could tower.
Rainfall
GPE
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm
Eric Shatzker
PERSON
and welcome to
Bloomberg's Front Row
ORG
.
Today
DATE
, I'm talking to
Jean Hines
PERSON
, the CEO of
Wellington Management
ORG
.
Boston
GPE
based
Wellington
GPE
is
one
CARDINAL
of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments. But because it's a private partnership, the firm has been shrouded in mystery.
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. She says sustainability will transform the structure of financial markets. We don't think it's woke. We think it's part of like a very very important part of studying the That in the risk set of of
5000
CARDINAL
companies. Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. Do you believe that? I believe that. Gina and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Why she's still believes in globalization and having a presence in
China
GPE
? The virtues and challenges of active management. What to expect from
Wellington
GPE
.
People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Renewable. This is a level of uncertainty that we haven't had to deal with. Television and radio. Deflation is a terrible thing. Inflation you could tower.
Info
PERSON
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm
Eric Shatzker
PERSON
and welcome to
Bloomberg's Front Row
ORG
.
Today
DATE
, I'm talking to
Jean Hines
PERSON
, the CEO of
Wellington Management
ORG
.
Boston
GPE
based
Wellington
GPE
is
one
CARDINAL
of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments. But because it's a private partnership the firm has been shrouded in mystery. Changing that. ESG investing one of
Wellington
GPE
's top priorities She says sustainability will transform the structure of financial markets. We don't think it's wolf we think it's part of like a very very important part of studying the
Sustainability
ORG
. Yeah, absolutely. You believe that? I believe that.
Jean
PERSON
and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Virtues and challenges of active management. What to expect from
Wellington
GPE
's expansion into alternatives? The value of staying private. Here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
. Is
one
CARDINAL
of the world's largest investment firms. But To
Black Rock
GPE
,
Pimco
NORP
,
Sidelity
NORP
,
Vanguard
ORG
, I could name others of course. It's hardly known. And certainly not well understood. Why? For a long history, we have had a very low public profile. So, that that would be number one. I would say another reason is that we are a subvisor. So, our largest business one of our largest businesses to be a subvisor to other Companies that are well known household names such as
Vanguard
ORG
and
Fidelity
ORG
and T Row Price for example. So, we would we don't we don't market directly to consumers. We are the content provider. So you combine those
two
CARDINAL
that we're not, we're not actually, we're not a household name, brand name, but in also with the same time, we had a very low public profile It's probably the reason most people don't know us. Is Public profile flying under the radar if you like being a little mysterious good for business a competitive advantage it Served us well over time. I think for our current, if you, if you look in
2022
DATE
, why am I talking to you
today
DATE
? We rely on partners. We're finding that it is important that our brand is known for our content. I think Very importantly and maybe even more importantly I also think it helps with talents So it's very interesting.
Inflation is a terrible thing. Inflation you could tower.
Info
PERSON
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm
Eric Shatzker
PERSON
and welcome to
Bloomberg's Front Row
ORG
.
Today
DATE
, I'm talking to
Jean Hines
PERSON
, the CEO of
Wellington Management
ORG
.
Boston
GPE
-based
Wellington
GPE
is one of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments. But It's a private partnership the firm has been shrouded in mystery
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. Sustainability will transform the structure of financial markets. We don't think it's wolf we think it's part of like a very very important part of studying the Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. Do you believe that? I believe that. Gina and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Why she's still believes in globalization and having a presence in
China
GPE
the virtues and challenges of active management. What to expect from
Wellington
GPE
's expansion into alternatives? The value of staying private. Here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
. Of the world's largest investment firms. But To
Black Rock
GPE
, Sidelity I could name others of course It's hardly known. And certainly not well understood Why? For a long history, we have had a very low public profile so that that would be number one. I would say another reason is that we are a sub advisor. So, our largest business
One
CARDINAL
of our largest businesses to be a subvisor to other companies that are well known household names such as
Vanguard
ORG
and
Fidelity
ORG
and T Row Price for example. So, we would we don't we don't market directly to consumers. We are the content provider So you combine those
two
CARDINAL
that we're not we're not actually we're not a household name brand name but in also with the same time we had a very low public profile is probably the reason most people don't Us. Is Low public profile flying under the radar if you like being a little mysterious good for business a competitive advantage It probably served us well over time. I think for our current, if if you look in
2022
DATE
, why am I talking to you
today
DATE
? We rely on partners. We're finding that it is important that
Brand
ORG
is not known for our content. I think Maybe even more importantly I also think it helps with talents So, it's very interesting that, you know, for
years
DATE
and
years
DATE
and years, we would be, we would try to have track talent and no one would ever know anything about us And that served us that was fine when we were a
Boston
GPE
-based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. Hasn't it in the asset management industry, the importance of having a brand? Most of the asset management industry has made a bet. Yeah. On sustainability. Yeah. But ESG is is under attack There are state governments. Yeah. Here in the
US
GPE
that are War on sustainable finance. They they're calling it wokeism. What do you think of that? We're not investing on the same ability from a value based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earning? It's gonna how what are the risks to the companies from ESG factors? What are the opportunities for From an ESG factor. So, we don't think it's woke. We think it's part of like a very, very important part of studying the That in the risk set of
Mystery.
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. She says sustainability will transform the structure of financial markets. We don't think it's woke we think it's part of like a very very important part of studying the opportunity set and the risk set of of
5000
CARDINAL
companies is that to say there's alpha and ESG or alpha and sustainability yeah absolutely do you believe that I believe that. Gina and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Why she's still believes in globalization and having a presence in
China
GPE
? The virtues and challenges of active management. What to expect from
Wellington
GPE
's expansion into alternatives? The value of staying private. Here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
.
One
CARDINAL
of the world's largest investment firms. But To
Black Rock
GPE
, Sidelity Vanguard I could name others of course It's hardly known And certainly not well understood. Yeah. Why? For a long history, we have had a very low public profile. So, that that would be number one. I would say another reason is that we are a subvisor. So, our largest business one of our largest businesses to be a sub advisor to other companies that are well known, household name Such as
Vanguard
ORG
and
Fidelity
ORG
and T Row Price for example. So, we would we don't we don't market directly to consumers. We are the content provider. So you combine those
two
CARDINAL
that we're not, we're not actually, we're not a household name, brand name, but in also with the same time, we had a very low public profile Is probably the reason most people don't know us. Is having a low public profile flying under the radar if you like being a little mysterious. Good for business. A competitive advantage. It probably served us well overtime. I think for our current if you if you look in
2022
DATE
why am I talking to you
today
DATE
? I think the main reason is because we're a subvisor and we rely on partners. We're finding that it is important that that our brand is known for our content. I think Very importantly and maybe even more importantly I also think it helps with talents So it's very interesting that you know for
years
DATE
and
years
DATE
and years we would be we would try to have track talent and no one would ever know anything about us And that served us that was fine when we were a
Boston
GPE
based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. Hasn't it in the asset management industry the importance of having a brand most of the asset management industry has made a bet. Yeah. On sustainability. Yeah. But ESG is is under attack Right there are state governments. Here in the
US
GPE
that are waging war on sustainable finance. They they they're calling it wokeism. What do you think of that? We're not investing on the same ability from a value based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earning? It's gonna how what are the risks to the From ESG factors. What are the opportunities for companies from an ESG factor? So, we don't think it's woke. We think it's part of like a very, very important part of studying the
Sat
ORG
in the risk set of of
5000
CARDINAL
companies. Is that to say there's alpha and ESG or alpha and sustainability?
Apps
PERSON
? Yeah, absolutely. You believe that? I believe that. The alpha will all be in the nuance of company research. You know, what, you know, which companies and and in the life science tools industry for example are going to create products to help biologic manufacturing, be less admitting. You're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year. So, if you will of like building a moment
Model
PERSON
and back testing it. Of what the factors were in
the last decade
DATE
. Almost every CEO. In almost every industry. Grew up believing that globalization was good. And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for
Why she's still believes in globalization and having a presence in
China
GPE
The virtues and challenges of active management. What to expect from
Wellington
GPE
's expansion into alternatives? The value of staying private. Here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
One of the world's largest investment firms. But To
Black Rock
GPE
, Sidelity Vanguard I could name others of course. It's hardly known. And certainly not well understood. Why? For a long history, we have had a very low public profile. So, that that would be number one. I would say another reason is that we are a subvisor. So, our largest business one of our largest businesses to be a sub advis Other companies that are well known, household names, such as
Vanguard
ORG
and
Fidelity
ORG
and T Row Price for example. So, we would we don't we don't market directly to consumers. We are the content provider. So, you combine those
two
CARDINAL
that we're not, we're not actually, we're not a household name, brand name, but in also with the same time, we had a very low public Most people don't know us. Is Public profile flying under the radar if you like being a little mysterious. Good for business. A competitive advantage. It Served us well over time. I think for our current if if you look in
2022
DATE
why am I talking to you
today
DATE
? We rely on partners. We're finding that it is important that that our brand is known for our content. I think Very importantly and maybe even more importantly I also think it helps with talents So, it's very interesting that, you know, for
years
DATE
and
years
DATE
and years, we would be And no one would ever know anything about us And that served us that was fine when we were a
Boston
GPE
based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. That's been a big change, hasn't it in the asset management industry, the importance Having a brand. Most of the asset management industry has made a bet. Yeah. On sustainability. Yeah. But suddenly ESG is is under attack Right there are state governments. Here in the
US
GPE
that are waging war on sustainable finance. They they they're calling it wokeism. What do you think of that? We're not investing on the same ability from a value based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earnings gonna how what are the risks to the News from ESG factors. What are the opportunities for companies from an ESG factor? So, we don't think it's woke. We think it's part of like a very, very important part of studying the That in the risk set of of
5000
CARDINAL
companies is that to say there's alpha and ESG or alpha and sustainability? You believe that? You know, what, you know, which company is in Science tools industry for example are going to create products to help biologic manufacturing be less admitting you're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year.
Us
GPE
if you will of like building a momentum model and back testing it. Of what the factors were in
the last decade
DATE
. Almost every CEO. In almost every industry. Grew up believing that globalization Was good. And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for. Yeah.
15 years
DATE
. Yeah. Is that still the case Yes, I would, I would suspect that as at the end of my tenure at
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Europe
LOC
and
Asia
LOC
, it could be closer to
40%
PERCENT
of our employees. So, we are deliberately and intentionally continuing into invested in our offices around the globe. But you're The deglobilization is we're in a period of of regime change and declabilization. There is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We use.
Been more importantly I also think it helps with talents So it's very interesting that you know for
years
DATE
and
years
DATE
and years we would be we would try to have a track talent and no one would ever know anything about us And that served us that was fine when we were a
Boston
GPE
-based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. Hasn't it in the asset management industry the importance of having a brand most of the asset management industry has made a bet yeah on sustainability yeah But suddenly ESG is is under attack. Our state governments. Yeah. Here in the
US
GPE
that are War on sustainable finance. They they're calling it wokeism. What do you think of that? We're not investing on the same ability from a value based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earning? It's gonna how what are the risks to the companies from ESG factors? What are the opportunities or From an ESG factor. So, we don't think it's woke. We think it's part of like a very, very important part of studying the That in the risk set of of
5000
CARDINAL
companies. Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. You believe that? Alpha I'll be in the nuance of company research You know, what, you know, which companies in
Science
ORG
tools and disrefer example are going to create products to help Manufacturing. Be less admitting. You're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year. You will of like building a momentum model and back testing it. Of what the factors were in
the last decade
DATE
. Almost every CEO In almost every industry. Grew up believing that globalization It. Globalizing has been a priority. Yeah. Of
Wellington
GPE
's for. Yeah. 15 years Is that still the case?
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Europe
LOC
and
Asia
LOC
it could be closer to
40%
PERCENT
of our employees so we are deliberately and intentionally continuing into invested in our offices around the globe but you're right
Globalization
PERSON
is we're in a period of regime change and deglobilization. I don't think that necessarily impacts our business into the extent that there is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We used to think we had a monopoly of investment talent in
Boston
GPE
and that clearly wasn't the You know, the reason we began to globalize our investment platform is is that the world was expanding the number of companies that were in
Europe
LOC
and
Asian
NORP
. Who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are, this is a global firm, this is a global economy, and even if if there are certain trends that are de globalizing. There is still a world there for us to either think about from a company perspective or think about from a from an economic from an economic perspective.
China
GPE
has become And is still becoming an increasingly complex place in which to do business. How do you manage that? So we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and in in
China
GPE
Rashang High office. We are expanding our license to be able to invest in in the onshore
China
GPE
. Right now, it's small. But with an important place for us to do research. Are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession Long lived it may be. Oh I think our clients have not made major changes. There's definitely more interest in our our commodities capabilities. Our inflation capabilities, our value, investing capabilities, which have been out of favor and and unfortunately, for for us, we continue doing More interest than they have had in the past
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5000
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companies. Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. You believe that? Alpha I'll be in the nuance of company research You know, what, you know, which companies in in the life science tools industry for example are going to create products to help
Biologic
PERSON
manufacturing be less admitting you're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year. If you will of like building a momentum model and back testing it. Of what the factors were in
the last decade
DATE
. Almost every CEO In almost every industry Grew up believing that globalization And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for
15 years
DATE
. Yeah. Is that Yes I would I would suspect that as at the end of my tenure at
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Asia
LOC
. It could be closer to
40%
PERCENT
of our employees. So, we are deliberately and intentionally continuing into invested in our offices around the globe. But you're right.
The De Globalization
ORG
is we're in a period of of regime change and deglobilization. I don't think that necessarily impacts our business and to the extent There is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We used to think we had a monopoly of investment talent in
Boston
GPE
and that clearly wasn't the case. You know, the reason we began to globalize our investment platform is is that the world was expanding the number Who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are is a global firm. This is a global economy and even if if there are certain trends that are de globalizing. There is still a world there for us to either think about from a company perspective or think about from a from an economic from an economic perspective.
China
GPE
has become And is Coming and increasingly complex place in which to do business How do you manage that? So, we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and in
China
GPE
Through saying hi office we are expanding our license to be able to invest in in the onshore
China
GPE
right now it's small but with an important place for us to do research are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession however long lived it may be oh I think Clients have not made major changes there's definitely more interest in our our commodities capabilities our inflation capabilities our value investing capabilities which have been out of favor and and unfortunately for for us we continue to To those teams. More interest than they have had in the past Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
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of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or rob Whether or not a human ever gets their eyes on it. That might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination. The
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
Almost every industry Grew up believing that globalization was good And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for. Yeah.
15 years
DATE
. Yeah. Is that still the case? Yes, I would, I would suspect that as at the end of my tenure at
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Europe
LOC
and
Asia
LOC
, it could be closer to
40%
PERCENT
of our employees. So, we are deliberately and intentionally continuing into invested in our offices around the globe. But There is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We used to think we had a monopoly of investment talent in
Boston
GPE
and that clear Wasn't the case. You know, the reason we began to globalize our investment platform is is that the world was expanding the number of companies that were in
Europe
LOC
and
Asian
NORP
. Who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are this is a global firm. This is a global economy and even if if there are certain trends that are deglobalizing. There is still a world there for us either think about from a company perspective or think about from a from a economic from an economic perspective.
China
GPE
has become And is still becoming an increasingly complex place in which to do business. How do you manage that? So we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and and in China Right now it's small but it's an important place for us to do research are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession Long lived it may be. Oh I think our clients have not made major changes. There's definitely more interest in our our commodities capabilities, our inflation capabilities, our value, investing capabilities, which have been out of favor and and unfortunately for for us, we continue to More interest than they have had in the past Companies now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or rob Is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? In
the coming months
DATE
do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Wellington
GPE
is an active manager Texting? No. How come that's not our core skill set going back to what is our core skills that our core skill set is being a research based And having these teams
Our business into the extent that there is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We used to think we had a monopoly of investment talent in
Boston
GPE
and that clearly wasn't the case. You know, the reason we began to globalize our investment platform is is that the world was expanding the number of Beneath that were in
Europe
LOC
and
Asian
NORP
who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are is a global firm. This is a global economy and even if if there are certain trends that are declabilizing. There is still a world there for us to either think about from a company Or think about from a from an economic from an economic perspective.
China
GPE
has become And is still becoming an increasingly complex place in which to do business. How do you manage that? So we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and and in
China
GPE
We're saying hi office. We are expanding our license to be able to invest in in the onshore
China
GPE
. Right now, it's small. But with an important place for us to do research. Are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession however long lived it may be I think our clients have not made major changes. There's definitely more interest in our our commodities capabilities, our inflation capabilities, our value, investing, capabilities, which have been out of favor and and fortunately for for We continue to invest in those teams but those are probably on the margin more interest than they have had in the past. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or rob Gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. For the
FTC
ORG
, I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming through We will not just cut and run. The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Wellington
GPE
is an active manager. No indexing? No. No passives? No. How come? That's not our core skill set going back to what is our core skills that our core skill set is being a research based And having these teams of of portfolio managers with different skill sets that practice their philosophy and process. There were research based content company generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying? That the implicit promise to investors and actively managed Is that they'll either get alpha I beat the market. Yeah. Or better risk adjusted returns. Yeah I I think for us that it would I think Clients are asking for both of us, right? Hey portal
Unfortunately, for, for us, we continue to invest in those teams. But those are probably on the margin more interest than they have had in the past. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or rob Gonna decide whether or not a human ever gets their eyes on it. Segment of the population that might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination. Really
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? In
the coming months
DATE
do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority.
Wellington
GPE
is an active manager No no passives no. How come? That's not our core skills that going back to what is our core skills that our core skill set is being a research based And having these teams of of portfolio managers with different skill sets that practice their philosophy and process. There were research-based content company generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying that the implicit promise to investors and actively managed Is that they'll either get alpha I beat the market. Yeah. Or better risk adjusted returns. Yeah I I think for us that it would I think Clients are asking for both of us, right? They're asking clients for it all. Alpha and risk adjusted returns and that's Post a full financial crisis. Risk the pathway returns has become more important. But you go back to the basics. If you can generate
100
CARDINAL
basis points of
Far
ORG
a
200
CARDINAL
basis points of alpha over indeceased that is a tremendous compounding effect. The reality, however, is that a cross the asset management industry, the active. Yeah. Investment management industry. Alpha is oh or sometimes negative after fees and the returns aren't any better on a risk adjusted So, if that remains the case, what is the future for active management? We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment where we have this and I I do mean this. We have an incredible investment ecosystem. We don't have a CIO. We have an
600
CARDINAL
An investment ecosystem that that collaborates that shares ideas that we're different perspective, different opinions on the same subject are welcome and thrive. If we can continue to do that and that's that, that's the input. Like, can we do that? Then, hopefully, our output over time. Well, generate those returns. Private Assets and alternatives. Yeah. Are still a small piece. Yeah. Of
Wellington
GPE
's $
one
MONEY
.
20 billion
CARDINAL
in NAUM. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases, excellent at what they do. Into the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on. It's
fourth
ORDINAL
fund. So, we. That was the the growth equity initiative. Yeah, so we have
four
CARDINAL
by
the end of this year
DATE
, we're gonna have
four
CARDINAL
platforms. Growth equity Biotech climate technology and investing in diverse
Trust them to self regulate
AI In the coming months
WORK_OF_ART
. We will not just cut The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Wellington
GPE
is an active manager No indexing. How come that's not our core skill set going back to what is our core skills that our core skill set is being a research based Portfolio manager with different skill sets that practice their philosophy and process There were research based content company generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying that the implicit promise to investors and actively managed products? Is that they'll either get alpha? I'd beat the market. Yeah. Or better risk adjusted returns. Yeah I I think for us that it would I think you you if it's clients are asking for both of us right I'm asking clients for it all alpha Alpha and risk adjusted returns and that's postful financial crisis. Risk the pathway returns has become more important. But you go back to the basics. If you can generate
100
CARDINAL
basis points of alpha, a
200
CARDINAL
basis points of alpha, over indeceased, that is a tremendous compounding effects. The reality, however Is that across the asset management industry the active investment management
Alpha
PRODUCT
is oh or sometimes negative after fees and the returns aren't any better on a risk adjusted basis. So, Remains the case. What is the future for active management? We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment. We already have this and I I do mean this. We have an incredible investment ecosystem. We don't have a CIO. We have an
600
CARDINAL
person investment eco That call that collaborates that shares ideas that we're different perspective, different opinions on the same subject are welcome and thrive. If we can continue to do that and that's that that's the input. Like, can we do that? Then, hopefully, our output over time will generate those returns. Private assets and altern Are still a small piece. $
One
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20 billion
CARDINAL
in In a
UM
ORG
. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases, excellent at what they do. Into the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on. It's
fourth
ORDINAL
fund. So, we. That was the the growth equity initiative. Yeah, so we have
four
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, by
the end of this year
DATE
, we're gonna have
four
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platforms Growth equity
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PRODUCT
a technology and investing in diverse founders. So, where else can we go? So, that's the question. Like, where else are we, what are our ambition? Yeah, where else does it? The world can we go? We have a very Public footprint and credit. So, there are areas that we should play on the private side and credit to be successful. We don't have to be, it's not about being number
one
CARDINAL
or
number two
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. It's about growing that part of the business and generating great results for clients that help, that help the overall business. Is true on on real estate so we have a very strong structure that capabilities as well as real estate equity capabilities so can we attract talent to help us all the compliment those on the public side you know longer term we we have we have we have One hybrid fund. You know, you could envision us having hybrid funds by sector that could that let's like a natural extensions. We have such strong sector teams. So, those assets are what right now. Altogether. Should be
seven
CARDINAL
or eight 1 billion so it's a small part.
How come that's not our core skill set going back to what is our core skills that our core skill set is being a research based Portfolio manager with different skill sets that practice their philosophy and process. There were research-based content company generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying that the implicit promise to investors in actively managed Is that they'll either get alpha I beat the market. Yeah. Or better risk adjusted returns. Yeah I I think for us that it would I think Clients are asking for both of us, right? Hey portal call
Alpha Alpha
LOC
and risk adjusted returns and that's post a full financial crisis risk the pathway returns has become more important but you go back to the basics if you can generate
100
CARDINAL
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200
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basis points of alpha over indeceased that is a tremendous compounding effects the reality however
Cross
ORG
the asset management industry the active investment management
Alpha
PRODUCT
is oh or sometimes negative after fees and the returns aren't any better on a risk-congested basis. So, if that remains the case, what is the For active management. We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment. We already have this and I I do mean this. We have an incredible investment ecosystem. We don't have a CIO. We have an
600
CARDINAL
person investment ecosystem that that
Different
ORG
opinions on the same subject are welcome and thrive. If we can continue to do that and that's that that's the input. Like can we do that? Then hopefully our output over time will generate those returns. Private assets and alternatives. Yeah. Are still a small Yeah. Of
Wellington
GPE
's $
one
MONEY
. 20 billion in In a
UM
ORG
. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases, excellent at what they do. Into the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on. It's
fourth
ORDINAL
fund. So, we. That was the the growth equity initiative. Yeah, so we have
four
CARDINAL
, by
the end of this year
DATE
, we're gonna have
four
CARDINAL
platform Growth equity
Climb
PRODUCT
a technology and investing in diverse founders. So, where else can we go? So, that's the question like, where else are where what are our ambitions? Overall, can we go? We have a very Public footprint and credit. So, there are areas that we should play on the private side and credit. To be successful, we don't have to be, it's not about being number
one
CARDINAL
or
number two
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. It's about growing that part of the business and generating great results for clients that help, that help the overall business. Same is true on on real estate so we have a very strong structured debt capabilities as well as real estate equity capabilities so can we attract talent to help us all the compliment those on the public side you know longer term we should we have we have we have One hybrid fund. You know, you could envision us having hybrid funds by sector that could that let that like a natural extensions. We have such strong sector teams. So, those assets are what right now. Altogether. Should be
seven
CARDINAL
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seven to eight
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. The liquid alternatives. We've been in that Been in the long short business since
1994
DATE
. Mm hmm. And that that business is
approximately 30 1 billion
MONEY
. Okay. So, put them together and you're getting close to 40. Gina, there aren't many people In your position who started out. No. As administrative assistants. And rose to become CEO at the same company really the only place you've ever worked yes Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I, my parents were
Irish
NORP
immigrants My mother raised
six
CARDINAL
kids and my father was a
Brooklayer
PERSON
. So, I didn't know anything about stock market. We didn't talk about stocks around the kitchen table at my house. But I I would say.
Clients are asking for both of us right Clients want it all And Alpha and risk adjusted returns and that's postful financial crisis. Risk the pathway returns has become more important. But you go back to the basics. If you can generate
100
CARDINAL
basis points of alpha, a
200
CARDINAL
basis points of alpha over indeceased. That is a tremendous compounding effects. The However, is that across the asset management industry, the active investment management industry, Is oh or sometimes negative after fees and the returns aren't any better on a risk adjusted basis so Remains the case. What is the future for active management? We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment. We already have this and I I do mean this. We have an incredible investment ecosystem. We don't have a CIO. We have an
600
CARDINAL
person investment eco Shares ideas that we're different perspective different opinions on the same subject are welcome and thrive if we can continue to do that and that's that that's the input like can we do that then hopefully our output over time will generate those returns private assets and altern Are still a small piece. $
One
MONEY
.
20 billion
CARDINAL
in In a
UM
ORG
. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases, excellent at what they do. Into the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on, it's
fourth
ORDINAL
fund. So, we. That was the the growth equity initiative. Yeah, so we have
four
CARDINAL
, by
the end of this year
DATE
, we're gonna have
four
CARDINAL
platforms Growth equity
Climb
PRODUCT
a technology and investing in diverse founders. So, where else can we go? So, that's the question. Like, where else or where, what are our ambition? Yeah, where else does it? The world can we go? We have a very Public footprint and credit. So, there are areas that we should play on the private side and credit to be successful. We don't have to be, it's not about being number
one
CARDINAL
or
number two
CARDINAL
. It's about growing that part of the business and generating great results for clients that help, that help the overall business. The same is true on on real estate. So, we Very strong structured debt capabilities as well as real estate equity capabilities so can we attract talent to help us all though compliment those on the public side you know longer term we we have we have a we have one hybrid fund you know you could envision Having hybrid funds by sector that could that like that's like a natural extensions where you have such strong sector teams. So those assets are what right now. Altogether. Should be
seven
CARDINAL
or eight 1 billion so it's a small part but still an important part of the business. It's an alternatives. Privates and alternatives are
seven
CARDINAL
, eight, the liquid alternatives. We've been in that, we've been in the long short Since
1994
DATE
and that that business is
approximately 30 1 billion
MONEY
. Okay. So, surprise together and you're getting close to
40
CARDINAL
. Many people In your position who started out as administrative assistant And rose to become CEO at the same company really the only place you've ever worked yes Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I, my parents were
Irish
NORP
immigrants My mother raised
six
CARDINAL
kids and my father was a brick layer. So, I didn't know anything about stock market. We didn't talk about stocks around the kitchen table at my house but I I would say they were very focused on education and so I Practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. In in as one of those, one of the classes I took, which was in my junior year, it was sociology. It was a sociology class That you had to get a job. I recall it has a class you have to take. This was the class you had to take but I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
.
Both equity initiatives. Yeah, so we have
four
CARDINAL
, by
the end of this year
DATE
, we're gonna have
four
CARDINAL
platforms. Growth equity Biotech climate technology and investing in diverse founders. So, where else can we go? So, that's the question like where else or where are ambitions? Yeah, where else does it where else can we go? We have a very Public footprint and credit. So, there are areas that we should play on the private side and credit to be successful. We don't have to be, it's not about being number
one
CARDINAL
or
number two
CARDINAL
. It's about growing that part of the business and generating great results for clients that help that help the overall business. The same is true on on real estate so we have a very strong structured debt capabilities as well as real estate equity capabilities. So can we attract talent to help us all the compliment those on the public side? You know, longer term, we we have we have a we One hybrid fund. You know, you could envision us having hybrid funds by sector that could that's like a natural extensions. We have such strong sector teams. So, those assets are what right now. All together. By
the end of the year
DATE
, they should be
seven
CARDINAL
or eight 1 billion. So, it's a small part. But still an important part of That that's that's privates and alternatives. Privates and alternatives are
seven to eight
CARDINAL
. The liquid alternatives. We've been in that we've been in the long short business since
1994
DATE
and that that business is
approximately 30 1 billion
MONEY
. Okay. So supplies together in your getting To
40
CARDINAL
. People. In your position who started out As administrative assistants. Yeah. And
Rose
PERSON
to become CEO at the same company. Really, the only place you've ever worked. Yes. Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I, my parents were
Irish
NORP
immigrants. My mother raised
six
CARDINAL
kids and my father was a brick layer. So, I didn't know anything about stock market. Around the kitchen table at my house but I I would say they were very focused on education and so I Got practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. And and as one of those one of the classes I took which was in my junior year it was sociology. It was a sociology class That you had to get a job. I recall it has a class you have to take. This was the class you had to take but I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were higher higher in college graduates as administrative So that story. Start to manage money. Yup. And at what point did you realize that this firm was interested in cultivating you as a leader? So, I started managing money in
1997
DATE
and so and every year from then, I began to manage more money in
1999
DATE
. I I was able to run a
Tech
ORG
portfolio
2000
DATE
. Those portfolio management skills. Hey Again, my leadership journey right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large
Family
PRODUCT
a big
Irish
NORP
family I had I had my my my life was planned out I had social events all the time barbecues here so I actually do think moving to
London
GPE
being alone with my small family unit
Away
PERSON
from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership journey. And then I became managing partner in
2014
DATE
. You're still running the world's largest health care fund. Yes. How's that possible? Managing
46 1 million dollars
MONEY
With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. What also being the CEO?
All together. By
the end of the year
DATE
, they should be
seven
CARDINAL
or eight 1 billion. So, it's a small part. But still an important part of the That that's that's privates and alternatives. Privates and alternatives are
seven to eight
CARDINAL
. The liquid alternatives. We've been in that we've been in the long short business since
1994
DATE
and that that business is
approximately 30 1 billion
MONEY
. Okay. So Who started out as administrative assistants Comes CEO at the same company really the only place you've ever worked yes Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I at my parents were
Irish
NORP
immigrants. My mother raised
six
CARDINAL
kids and my father was a brick layer. So, I didn't know anything about stock market. We didn't Around the kitchen table at my house but I I would say they were very focused on education and so I Practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. In in as one of those one of the classes I took which was in my junior year it was sociology. It was a sociology class That you had to get a job. Every college has a cost you have to take. This was the class you had to take but I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were higher higher in college graduates as administrative So that story. Start to manage money. Yeah. And at what point did you realize that this firm was interested in cultivating you as a leader? So, I started managing money in
1997
DATE
and so and every year from then, I began to manage more money in
1999
DATE
. I I was able to run a
Tech
ORG
portfolio
2000
DATE
. Those portfolio management skills. Hey Again, my leadership journey right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large
Family
PRODUCT
a big
Irish
NORP
family I had I had my my my life was planned out I had social events all the time barbecues here so I actually do think moving to
London
GPE
being alone with my small family unit
Away
PERSON
from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership journey. And then I became managing partner in
2014
DATE
. You're still running the world's largest health care fund. Yes. How's that possible? Managing
46 1 million dollars
MONEY
With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. What also being the CEO? Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? So, everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is your superpower. Superpower is organization. Is organized and and sort of a superpower and processes. I think it would be, it would probably be impossible. The product may read made in the
USA
GPE
but
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
my current technology
Sanjay Mayhotra
PERSON
And that doesn't count
Indians
NORP
running companies all over the world. Incredibly competitive education system if you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later
Kids and my father was a brick layer. So, I didn't know anything about stock market. We didn't talk about stocks around the kitchen table at my house but I I would say they were very focused on education and so I Practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. In in as one of those, one of the classes I took, which was in my junior year, it was sociology. It was a sociology class That you had to get a job. I recalled how the class you have to take. This was the class you had to take. But I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were higher higher in college graduates as administrative Systems. Did you start to manage money? Yeah. And at what point did you realize that this firm was interested in He was a leader. So, I started managing money in
1997
DATE
So in
every year
DATE
from then I began to manage more money in
1999
DATE
I I was able to run a biotech portfolio and in
2000
DATE
I was able to run a sleeve of
the Hartford Healthcare Fund
ORG
and then the decade of the
2000
DATE
's was really like honing those research those portfolio management skills. I began my leadership journey Right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large family, a big
Irish
NORP
family. I I had my my my life was planned out. I had social events all the time.
Barbecue
ORG
's here. So, I actually do think moving To
London
GPE
being alone with my small family unit
Away
PERSON
from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership journey. And then I became managing partner in
2014
DATE
. The world's largest health care fund. Yes. How's that possible? With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. While also being the CEO. Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? Everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is. Superpower is organization. If I was Organized and and sort of a superpower and processes. I think it would be it would probably be impossible. Made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun
PERSON
dark patch eye
Microsoft
ORG
Sacha
Nadella IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mehotra
PERSON
and that's
Gap VM
ORG
ware and that Count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top? Incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a
Fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were higher higher in college graduates as administrative assistants so that story
Start
PRODUCT
to manage money. Yeah. And at what point did you realize that this firm was interested in cultivating you as a leader? So, I started managing money in
1997
DATE
and so and every year from then, I began to manage more money in
1999
DATE
. I I was able to run a biotech portfolio And in
2000
DATE
I was able to run a sleeve of
the Hartford Healthcare Fund
ORG
and then the decade of the
2000
DATE
's was really like honing those research those portfolio management skills I will say I began my leadership Right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large family, a big
Iri
GPE
My life was planned out. I had social events all the time. Barbecues here. So, I actually do think moving to
London
GPE
, being alone with my small family unit. Away from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership journey. And then I became managing partner in
2014
DATE
. You're still running the world's largest health care fund. Yes. How was that possible? Managing
46 1 million dollars
MONEY
With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. What also being the CEO? Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? So, everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is your superpower. Superpower is organization. Is organized and and sort of a superpower and processes. I think it would be, it would probably be impossible. The product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
my current technology
Sanjay Mehotra
PERSON
and that's just How did the chief executives of
Adobe
ORG
Deloitte Gap VM wear and that doesn'
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top?
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up about Reforce of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
and it's We've talked About The virtues of being a private partnership Have you ever wondered to yourself of
Wellington
GPE
would be better off Public company? No. Why not? I've I follow public companies my whole career and from a lot of public companies you have to really focus On
Continue
GPE
to operate with a lot.
With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. While also being the CEO. Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? Everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is. Superpower is organization. If i Organized and and sort of a superpower and processes. I think it would be it would probably be impossible. Product may read made in the
USA
GPE
but Made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
Sacha
Nadella IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mehotra
PERSON
and that's And that doesn't count
Indians
NORP
running companies all over the world. Incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a We've talked About The virtues of being a private partnership Have you ever wondered to yourself if
Wellington
GPE
would be better off Public company? No. Why not? I follow public companies my whole career and from a lot of public companies you have to really focus And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continue to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go Dramatic change in the industry where we need a capital in a way we don't need
today
DATE
. This company makes a lot of money We are in the asset management business and if we do well and we generate alpha for our clients it is a profitable business. I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public be treated companies. Yeah. With Management in the neighborhood of
Wellington
GPE
's. Only handful. But they make, you know, those with a
one
CARDINAL
handle on the trillions. More between one and
three 1 billion dollars
MONEY
a year. In net income. Is that ballpark for
Wellington
GPE
too? You're not gonna get me there. It's a nice try. Participate in the asset management industry We have a You know a similar We're not the same as everyone else. We don't have the we don't we are we are an investment management business. So we earn a fee for managing the money. We're not we're not heavily distribution oriented business. All of our compensation though is geared towards performance. So everyone at
Wellington
GPE
will do better if we For clients and that's the key. How do you decide who gets paid what? That's the other part of our partnership. The
three
CARDINAL
managing partners. Which I've
Competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
. And it's a We've talked About The virtues of being a private partnership Have you ever wondered to yourself if
Wellington
GPE
would be better off Public company? No. Why not I've I follow public companies my whole career and from a lot of public companies you have to really focus On And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continue to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go public? It would probably be some drama Change in the industry where we need to capital in a way we don't need
today
DATE
. This company makes Alpha for our clients it is a profitable business I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public betrayed companies. Yeah. With Under management in the neighborhood of
Wellingtons
ORG
. Only handful. But they make You know those with a
one
CARDINAL
handle on the
trillions
CARDINAL
Make somewhere between one and
three 1 billion dollars
MONEY
a year. In net income Is that ballpark for
Wellington
GPE
too? You're not gonna get me there It's a nice try. Say is that we are we participate in the asset management industry We have a A similar Heavily distribution oriented business. All of our compensation though is geared towards performance. So, everyone at
Wellington
GPE
will do better if we For clients and that's the key. How do you decide who gets paid what? So, that's that's the other part of our partnership, the
three
CARDINAL
managing partners, Which I've been won since
2014
DATE
. Distribute or determine the profit how the profits are split at the firm. So you have to imagine it has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust means I know they're they trust us to know what's going on in the business. Who's having impact that we're not gonna play favorites? That we're Really fair. Have been the ability to become a partner at
Wellington
GPE
A really critical part of our Talent has always been
One
CARDINAL
of the hardest Maybe the hardest problem to solve for in the investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created for diversity. How hard is the talent problem now i think the pandemic has shown us and it probably should show most companies that it's not about buildings it's about the culture it's about shared values In the future we're gonna be more flexible about where our talent sits how much of
Wellington
GPE
's success in the future depends on how well you integrate technology I think
5 years
DATE
from now we won't
We've talked About The virtues of being a private partnership Have you ever wondered to yourself if
Wellington
GPE
would be better off Public company? No. Why not? I've I follow public companies my whole career and from a lot of public companies you have to really focus On And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continue to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go public and it would probably be some drama In the industry where we need a capital in a way we don't Day. This company makes a lot of money, doesn't it? Alpha for our clients. It is a profitable business I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public betrayed companies. Yeah. With Assets under management in the neighborhood of
Wellington
GPE
's. Only handful. But they make You know those with a
one
CARDINAL
handle on the
trillions
CARDINAL
Make somewhere between one and
three 1 billion dollars
MONEY
a year. In net income Is that ballpark for
Wellington
GPE
too? You're not gonna Me there. It's a nice try. Say is that we are we participate in the asset management industry We have a You know a similar We don't have the we are we are an investment management business so we earn a fee Damaging the money. We're not, we're not heavily distribution oriented business All of our compensation though is geared towards performance So everyone at
Wellington
GPE
will do better if we perform for clients and that's the key. How do you decide who gets paid what? That's the other part of our partnership. The
three
CARDINAL
managing partners which I've been won since
2014
DATE
. Distribute or determine the profit how the profits are split at the firm. So you have to imagine there has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust means I know they're they trust us to know What's going on in the business? Who's having impact that we're not gonna play favorites? That we're gonna be really fair. The path to partners have been the ability to become a partner at
Wellington
GPE
A really critical part of our ability to attract talent. Talent has always been.
One
CARDINAL
of the hardest. Maybe the hardest problem to solve for in the investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created for diversity. How hard is the talent problem now i think the pandemic has shown us and it probably should show most companies that it's not about buildings it's about the culture it's
Shared
NORP
values. In the future, we're gonna be more flexible about where our talent sits. How much of
Wellington
GPE
's success in the future depends on how well you integrate technology? I think
5 years
DATE
from now, we won't have a technology department. We'll have technology will be integrated into Business and I'll give you some examples We have portfolio construction tools we have ways to screen Portfolio manager has a philosophy and process and they have AA tool that helps them screen based on that philosophy and process We have these tools now that are bring very qualitative things into a quantitative framework. We have our own internal risk portal So we have you continue to make that a greater and greater and we already talked about ESG and how much it's data oriented. How do you make that more and more part of the portfolio construction process? If we're if we're in a more comp World which I do believe we are in.
And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continued to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go public? It would probably be some dramatic In the industry where we need a capital in a way we don't need
today
DATE
. This company makes Money doesn't it? Alpha for our clients. It is a profitable business I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public betrayed companies. Yeah. With Under management in the neighborhood of
Wellington
GPE
. Only handful. But they make You know those with a
one
CARDINAL
handle on the
trillions
CARDINAL
Make somewhere between one and
three 1 billion dollars
MONEY
a year. In net income Is that ballpark for
Wellington
GPE
too? You're not gonna get me there It's a nice try. Say is that we are we participate in the asset management industry We have a A similar So we order fee for managing the money we're not we're not heavily distribution oriented business all of our compensation though is geared towards performance so everyone at
Wellington
GPE
will do better if we For clients and that's the key. How do you decide who gets paid what? That's the other part of our partnership. The
three
CARDINAL
managing partners. Which I've been one since
2014
DATE
. Reviewed or determined the profit how the profits are split at the firm so you have to imagine it has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust means I know they're they trust us to know what's going on in the business who's having impact that we're not gonna play favorites that we're gonna be really fair the path to partners have been the ability to become a partner at Well Is a really critical Of our Talent has always been
One
CARDINAL
of the hardest. Maybe the hardest problem to solve for in the investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created for diversity How hard is the talent problem now i think the pandemic has shown us and it probably should show most companies that it's not about buildings it's about the culture it's about
Shared
NORP
values. Technology. I think
5 years
DATE
from now, we won't have a technology department. We'll have technology will be integrated into running the business. And I'll give you some examples. We have portfo Construction tools we have ways to screen Portfolio manager has a philosophy and process and they have AA tool that helps them screen based on that philosophy and process. We have these tools now that are bring very qualitative things into a quantitative framework. We have our own internal risk portal. So we how do you continue to make that a greater and greater we already talked about ESG and how much it's data oriented how do you make that More part of the portfolio construction process. If we're if we're in a more complex world which I do believe we are in. A more complex investing world. Where it's not just about revenues and earnings and
PE
ORG
. It's about a This mosaic of things are gonna impact the value of a company or the value of that return like what's the path of portfolio returns Is going to play a bigger and bigger part of that. There are A lot of acid managers. Who do you think of us
Wellington
GPE
's main competition Well I will say I've talked to quite a number of them in in my new role as CEO and I have a lot of respect for my peers Observation would be that they're all a little bit different, right? They're all a little bit different. But if you look, if you look at overtime, who has sort of a research process that's similar to us? Like I would say capital group, T rope
The other part of our partnership the
three
CARDINAL
managing partners which I've been one since 2014 Reviewed or determined the profit how the profits are split at the firm so you have to imagine it has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust means I know they they trust us to know what's going on in the business who's having impact that we're not gonna play favorites that we're gonna be really fair the path to partners have been the ability to become a partner at Well Is a really critical part of our ability to attract talent. Talent has always been
One
CARDINAL
of the hardest Maybe the hardest problem to solve for in the investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created For diversity How hard is the talent problem now? I think the pandemic has shown us and it probably should show most companies that it's not about buildings. It's about the culture. It's about
Values
LOC
. In the future, we're gonna be more flexible about where our talent sits. How much of
Wellington
GPE
's success in the future depends on how well you integrate technology? I think
5 years
DATE
from now, we won't have a technology department. We'll have technology just will be integrated into running the business. And I'll give you some examples. We have portfo Instruction tools we have ways to screen Portfolio manager has a philosophy and process and they have AA tool that helps them screen based on that philosophy and process We have these tools now that I bring very qualitative things into
Rotate
ORG
a framework. Own internal risk portal We how do you continue to make that a greater and greater and we already talked about ESG and how much it's data oriented. How do you make that more and more part of the portfolio construction process? So if we're if we're in a more complex world, which I do believe we are in. A more complex investing world. Where it's not just about revenues and earnings It's about a this mosaic of things are gonna impact the value of a company or the value of that return like what's the path of portfolio returns A bigger and bigger part of that. There are About set managers. Yeah. Who do you think of as
Wellington
GPE
's main competition Well I will say I've talked to quite a number of them in my new role as CEO and I have a lot of respect for my peers Observation would be that they're all a little bit different, right? They're all a little bit different. But if you look, if you look at overtime, who has sort of a research process that's similar to us? Like I would say capital group,
T Row Price
ORG
, some often in meetings with capital and T Row Prize, you know, Pimco on the fixing come side is probably a compet That we highly respect in in and run into from a client perspective those would be a few examples and and then on the private side it's the it's it would be you know many many small firms and on the long short side name
three
CARDINAL
things you admire. At rival firms and wish willington could do as well. Alright. Well, this is okay, give me
a minute
TIME
to think about this. I think that if you look at
Black Rock
LOC
, they have, they use their As an advantage Interact with clients. I don't think anyone really in that in that way can compete with them. In terms of the competition with a lot and I think that that is the just very impressive. Capital group in there, in their There are they're distribution in the
US
GPE
for example. Let they have a real. They have a very strong relationship with broker dealers. In the
US
GPE
. That's also very impressive. If you look at some private firms, this is not so much direct competitors but firms that have been around for
20 years
DATE
. I think it's a real advantage if you've been on the private side. If you just have, if you've been around for quite a long period of time. So, obviously, firms like
Sequoia
ORG
, where they're not doing exactly what we're doing But they just have sort of this No I've I'm studying them quite a bit just because we are How do we get? How do we be excellent in the private business? And there's a few of them that have just done such a good job. Over time. That's been very impressive.
Much it's data oriented. How do you make that more and more part of the portfolio construction process? If we're if we're in a more complex world which I do believe we are in a more complex investing world. Where it's not just about revenues and earnings and
PE
ORG
. It's about This mosaic of things are gonna impact the value of a company or the value of that return like what's the path of portfolio returns Is going to play a bigger and bigger part of that. There are a lot of acid managers. Yup. Who do you think of us
Wellington
GPE
's main competition? Well I will say i've talked to quite a number of them in my new role as CEO and I have a lot of respect for my peers Observation would be that they're all a little bit different, right? They're all a little bit different. But if you look, if you look at overtime, who has sort of a research process that's similar to us? Like I would say capital group,
T Row Price
ORG
, I'm often in meetings with capital and T Row Price, you know, Pimco on the fixing come side is probably a compet Many many small firms and on the long short side. Name
three
CARDINAL
things you admire. At rival firms and wish willington could do as well. Alright. Well, this is okay, give me
a minute
TIME
to think about this. I think that if you look at
Black Rock
LOC
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US
GPE
for example. Let they have a real they have a very strong relationship with broker dealers. In the
US
GPE
. That's also very impressive. If you look at some private firms This is not so much direct competitors but firms that have been around for
20 years
DATE
. I think it's a real advantage if you've been on the private side. If you just have, if you've been around for quite a long period of time. So, obviously, firms like
Sequoia
ORG
, where they're not doing exactly what we're doing. But they just have sort of this No. I'm studying them quite a bit just because we are How do we get? How do we be excellent in the private business? And there's a few of them that have just done such a good job. Overtime. It's been very impressive. Is growing this business important to you and to your fellow partners? Well, you know, we follow
5000
CARDINAL
companies Always analyzing how our company's relative to their relative to their competition and their peers. So, we wanna we wanna win, right? So, we wanna do well. I'm also a strong believer in you can't aspire to grow just for growth sake you we have to be super focused on the inputs and if you do really well on the inputs you will grow as a firm the leadership team I think our partnership is very focused on that like if we have the right inputs and that means are we investing in talents Are we investing in new capabilities are we expanding in areas that we think will help our clients Then, hopefully, we will and we can deliver performance. We will grow. Let's talk about the legacy that you're in the process of defining. When you're colleagues and your clients. Yeah. Look back. On the jeans, hines era. Yeah. The CEO They'll say you accomplished what? Hire amazing talents We have made our collaborative investment ecosys Stronger and that we we have it been affirm it's growing so we've been able to expand the partnership and that we are delivering most importantly we're delivering Great outcomes to clients and maybe finally it's like to like it's more about like I do the previous CEOs of Don and figure out ways to strengthen
Wellington
GPE
so that it's That we have another 40
50 years
DATE
the next set of CEOs can continue that this is a now this is a I'm just passing through in a steward of this firm that you know my
almost 40 years
DATE
here whatever whatever I retire that that that I will know with you know know that this will that
Who has sort of a research process that's similar to us like I would say capital group T-road price. Probably a competitor that we highly respect in in and running to from a client perspective. Those would be a few examples and and then on the private side it's It's it would be, you know, many, many small firms and on the long short side. Name
three
CARDINAL
things you admire. At rival firms and wish willington could do as well. Alright. Well, this is okay, give me
a minute
TIME
to think about this. Think that if you look at
Black Rock
LOC
they have they use their As an advantage Interact with clients. I don't think anyone really in that in that way can compete with them. In terms of the competition with a lot and I think that that is the just very impressive. Capital group in their in their There are they're distribution in the
US
GPE
for example. Let they have a real. They have a very strong relationship with broker dealers. In the
US
GPE
. That's also very impressive. If you look at some private firms, this is not so much direct competitors but firms that have been around for
20 years
DATE
. I think it's a real advantage. If you've been on the private side, if you just have, if you've been around for quite a long period of time. So, obviously, firms like
Sequoia
ORG
, where they're not doing exactly what we're doing But they just have sort of this No I've I'm studying them quite a bit just because we are How do we get? How do we be excellent in the private business? And there's a few of them that have just done such a good job. Overtime. That's been very impressive. Is growing this business important to you and to your fellow partners? Companies Always analyzing how our company's relative to their relative to their competition and their peers. So, we wanna do, we wanna win, right? So, we wanna do well. I'm also a strong believer in you can't aspire to grow just for growth's sake you we have to be super focused on the inputs and if you do really well on the inputs you will grow as a firm the leadership team I think our partnership is very focused on that like if we have the right inputs and that means are we investing in talents Are we investing in new capabilities are we expanding in areas that we think will help our clients Then hopefully we will and we can deliver performance. We will grow. Let's talk about the legacy that you're in the process of defining. When your colleagues and your clients. Yeah. Look back. On the jeans, hinds era. Yeah. The CEO. They'll say you accomplished what? Hire amazing talents. Made our collaborative Ecosystem stronger and that we we have it been affirm as growing so we've been able to expand the partnership and that we are delivering most importantly we're delivering great outcomes to And maybe finally it's like to like it's more about like Can I do the previous CEOs have done and figure out ways to strengthen
Wellington
GPE
so that it's That we have another 40,
50 years
DATE
, Passing through in a steward of this firm that you know my
almost 40 years
DATE
here whatever whatever I retire that That I will know with you know, know that this will this firm will be very strong for
the next 50 years
DATE
. Thank you very much. Thank you
Eric
PERSON
. I really really enjoy our time. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods are transported to
Effects for my peers. Reservation would be that they're all a little bit different, right? They're all a little bit different. But if you look, if you look at overtime, who has sort of a research process that's similar to us? Like I would say capital group,
T Row Price
ORG
, I'm often in meetings with capital and T-road price, you know, pimpco on the fixing come side is probably a competitor We highly respect and and and run into from a client perspective. Those would be a few examples and and then on the private side it's the it's it would be you know many many small firms and on the long short side. Name
three
CARDINAL
things you admire. At Rival Firms and wish
Wellington
GPE
could do as well. Alright. Well, this is okay, give me
a minute
TIME
to think about this. I think that if you look at
Black Rock
LOC
, they have they use their As an advantage Interact with clients. I don't think anyone really in that in that way can compete with them in terms of the competition with a lot and I think that that is just very impressive. Capital group in there in their There are there are distribution in the
US
GPE
for example. Let they have a real. I have a very strong relationship with broker dealers in the
US
GPE
. That's also very impressive. If you look at some private firms This is not so much direct competitors but firms that have been around for
20 years
DATE
. I think it's a real advantage if you've been on the private side. If you just have, if you've been around for quite a long period of time. So, obviously, firms like
Sequoia
ORG
, where they're not doing exactly what we're doing. But they just have sort of this No I've I'm studying them quite a bit just because we are How do we get how do we be excellent in the private business and there's a few of them that have just done such a good job Overtime That's been very impressive. Is growing this business important to you and to your fellow partners? Well, you know, we follow
5000
CARDINAL
companies. Always analyzing how our companies relative to their relative to their competition and their peers. So, we wanna do, we wanna win, right? So, we wanna do well. I'm also a strong believer in you can't aspire to grow just for growth sake you we have to be super focused on the inputs and if you do really well on the inputs you will grow as a firm the leadership team I think our partnership is very focused on that like if we have the right inputs and that means are we investing in talents Are we investing in new capabilities are we expanding in areas that we think will help our clients Then, hopefully, we will and we can deliver performance. We will grow. Let's talk about the legacy that you're in the process of defining. When your colleagues and your clients. Yeah. Look back. On the jeans, hinds era. Yeah. The CEO. They'll say you accomplished what? That we continue to hire amazing talents We have made our collaborative investment ecosys Stronger and that we we have it been affirm that's growing so we've been able to expand the partnership and that we are delivering most importantly we're delivering Great outcomes to clients and maybe finally it's like to like it's more about like Can I do the previous CEOs of Don and figure out ways to strengthen
Wellington
GPE
so that it's That we have another 40
50 years
DATE
the next set of CEOs can continue that this is a now this is a I'm just passing through in a steward of this firm that you know my
almost 40 years
DATE
here whatever whatever I retire that that I will know with you know know that this will this Will be very strong for
the next 50 years
DATE
. Thank you very much. Thank you
Eric
PERSON
. I really really enjoy our time. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. Katrina shipping is the key component of
Someone in the private business and there's a few of them that have just done such a good job Overtime. That's been very impressive. Is growing this business important to you and to your fellow partners? Well, you know, we follow
5000
CARDINAL
companies Always analyzing how our company's relative to their relative to their competition and their peers. So, we wanna do, we wanna win, right? So, we wanna do well. I'm also a strong believer in you can't aspire to grow just for growth's sake you we have to be super focused on the inputs and if you do really well on the inputs you will grow as a firm the leadership team I think our partnership is very focused on that like if we have the right inputs and that means are we investing in talents Are we investing in new capabilities are we expanding in areas that we think will help our clients then hopefully we will and we can deliver performance we will grow let's talk about the legacy that you're in the process of defining. When you're colleagues and your clients. Yeah. Look back. On the jeans, hinds era. Yeah. The CEO. They'll say you accomplished what We have made our collaborative So we've been able to expand the partnership and that we are delivering most importantly we're delivering great outcomes to And maybe finally it's like to like it's more about like can I do the previous of done and figure out ways to strengthen So that it's We have another 40,
50 years
DATE
. Set of CEOs can continue that this is a now this is a Passing through in a steward of this firm that, you know, my
almost 40 years
DATE
here, whatever, whatever I retire, that That I will know with you know, know that this will this firm will be very strong for
the next 50 years
DATE
. Thank you very much. Thank you
Eric
PERSON
. I really really enjoy our time. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more important. Continuous shipping is the key component of global trade Transport that see at some point. Era of global commerce. About three% of all the worlds is huge. I'm from shipping. Sent me not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement To help reduce the emissions from these well stocked maritime
Myths
GPE
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when
That no, my
almost 40 years
DATE
here, whatever, whatever I retire, That I will know with you know, know that this will this firm will be very strong for
the next 50 years
DATE
.
Jean
PERSON
. Thank you very much. Thank you,
Eric
PERSON
. I really, really enjoyed our time. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Contrina
GPE
shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. Of all the worlds is huge commission 3 may% not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement To help reduce the emissions from these well stocked maritime
Bloomberg
GPE
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials Analyze Marcus You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Crypto You have a world of young people. That want their own financial system And their own culture. And it is very powerful. And i'm a big believer in it. Hi I'm
Shanali Basic
PERSON
and you're watching the Nets Big Risk in
a year
DATE
that was marked by
Russia
GPE
's warn
Ukraine
GPE
soaring inflation around the world and torn supply chains market sea risks everywhere but these
Finance
ORG
are looking further out for the next risks. I think that the promise of the
American
NORP
dream has to be defined It's almost no dispose about a future pandemic and almost no momenta The globalization you're gonna see nation states look internally and make sure that they have the ability To support themselves. Unless public and private investment rises and
Americans
NORP
are protected by the right agencies to ensure economic growth and to defend the labor force. These are the next big risks.
Katrina
EVENT
shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. I'm from shipping. Certainly not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement To help reduce the emissions from these well stocked maritime
Bloomberg
GPE
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Crypto You have a world of young people. That want their own financial system. And their own culture. And it is very powerful. And I'm a big believer in it Hi I'm
Shanali Basic
PERSON
and you're watching the Nets Big Risk in
a year
DATE
that was marked by
Russia
GPE
's warn
Ukraine
GPE
soaring inflation around the world and torn supply chains market sea risks everywhere but these
Finance
ORG
are looking further out for the next risks. I think that the promise of the
American
NORP
dream has to be defined It's almost no dispose about a future pandemic and almost no momenta The globalization you're gonna see nation states look internally and make sure that they have the ability To support themselves. Economic growth and to defend the labor force these are the next big risks There are always issues and for me there are
three
CARDINAL
in particular that I'm focused on intermediate and longer term one has to do with our population
More than a century
DATE
one of the pieces of the secret sauce for
the United States
GPE
growth has been the fact that we've had strong population growth and strong games in labor force and I'm concerned about that right now The
second
ORDINAL
area that I look at has to do with investment for
more than 150 years
DATE
the United States
GPE
has been one of the global leaders in long term investment both government investment and infrastructure and also corporate investment in private
That isn't quite a sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. I'm from shipping. Output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths?
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Crypto You have a world of young people. The one their own financial system And their own culture. And it is very powerful. And i'm a big believer in it. Hi I'm
Shanali Basic
PERSON
and you're watching the Nets Big Risk in
a year
DATE
that was marked by
Russia
GPE
's
Warn Ukraine
PERSON
soaring inflation around the world and torn supply chains market sea risks everywhere but these
three
CARDINAL
titans of finance are looking Out for the next risks. I think that the promise of the
American
NORP
dream has to be defined. Hey almost notice about a future pandemic and almost no momenta Globalization you're gonna see nation states look internally and make sure that they have the ability Support themselves.
Abby Joseph Cohen
PERSON
who is concerned that future generations in the
US
GPE
will not achieve the same financial stability as their parents unless public and private investment rises and
Americans
NORP
are protected by the right agencies to ensure economic growth and to defend the labor force these are the next big risks There are always issues and for me there are
three
CARDINAL
in particular that I'm focused on intermediate and longer term what has to do with our population
More than a century
DATE
one of the pieces of the secret sauce for
the United States
GPE
growth has been the fact that we've had strong population growth and strong games in labor force and I'm concerned about that right now The
second
ORDINAL
area that I look at has to do with investment. For
more than 150 years
DATE
,
the United States
GPE
has been one of the global leaders in long term investment both.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Crypto You have a world of young people. That want their own financial system. And their own culture. And it is very powerful. And I'm a big believer in it. Hi I'm
Shanali Basic
PERSON
and you're watching the Nets Big Risk in
a year
DATE
that was marked by
Russia
GPE
's warn
Ukraine
GPE
soaring inflation around the world and torn supply chains market sea risks everywhere but these
three
CARDINAL
tightens of finance are looking further Out for the next risks. I think that the promise of the
American
NORP
dream has to be defined. Hey almost know this voice about a future pandemic and almost no momenta The globalization you're gonna see
Internally
PERSON
and make sure that they have the ability To support themselves. With
Abby Joseph Cohen
PERSON
who is concerned that future generations in the
US
GPE
will not achieve the same financial stability as their parents unless public and private investment rises and
Americans
NORP
are protected by the right agencies to ensure economic growth and to defend the labor force. These are the next big risks There are always issues and for me there are
three
CARDINAL
in particular that I'm focused on intermediate and longer term one has to do with our population
More than a century
DATE
one of the pieces of the secret sauce
United States
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growth has been the fact that we've had strong population growth and strong games in labor force and I'm concerned about that right now The
second
ORDINAL
area that I look at has to do with investment. For
more than 150 years
DATE
,
the United States
GPE
has been one of the global leaders in long term investment both government investment and infrastructure and also corporate investment in private capital. And what we're seeing is Will you fall in short over
the last decade
DATE
or
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and we need to be looking at that as well and the
third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government In the economy and let me be very careful in how I express this. I believe in markets. I believe that capitalism has worked well in
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DATE
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Add to defend the labor force. These are the next big risks There are always issues and for me there are
three
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in particular that I'm focused on intermediate and longer term what has to do with our population
More than a century
DATE
one of the pieces of the secret sauce for
the United States
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growth has been the fact that we've had strong population growth and strong games in labor force and I'm concerned about that right now The
second
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area that I look at has to do with investment. For
more than 150 years
DATE
,
the United States
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has been one of the global leaders in long term investment both government investment and infrastructure and also corporate investment in private capital. And what we're seeing is that You fallen short over
the last decade
DATE
or
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third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government The economy and let me be very careful in how I express this. I believe in markets. I believe that capitalism has worked well in
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but not unfettered capitalism. We have benefited from good regulation. It's not always the best but when we try Protect As a nation. We tend to do much better. We look at some areas in which Kind of solid appropriate regulation may now be coming under some risk and I think that would actually damage long-term economic growth of
the United States
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the last 30 or 40 years
DATE
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dream has to be defined and that is Every generation Better than the previous generation. Do they have the The to do better than their parents did and what we have seen over
the last 30 years
DATE
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DATE
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DATE
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Cater
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two and we need to be looking at that as well and the
third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government The economy and let me be very careful in how I express this. I believe in markets. I believe that capitalism has worked well in
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but not unfettered capitalism. We have benefited from good regulation. It's not always the best but when we try Protect As a nation We tend to do much better. We look at some areas in which Kind of solid appropriate regulation may now be coming under some risk and I think that would actually damage long-term economic growth of
the United States
GPE
. What about the makeup of
the United States
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is creating a more complicated future for In the country. Reasons the
US
GPE
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the last 30 or 40 years
DATE
has been that we've had faster way before growth. You know, it's a very simple More workers, more GDP. Immigration by the way that's not new this has been a nation of immigrants since it's founding if we're not viewed as welcoming to talent from around the world we'll have a problem going Long term growth. When we look at the information from individual companies and industries, we see that there is a labor shortage at all ends. We all know for example that right now, one of the reasons behind the rise in service inflation has to do with an inadequate number of workers Airports. In hotels, in restaurants, and so on The area that I spend a lot of my time looking at is the other end as well do we have enough new scientist do we have enough new engineers do we have enough new doctors and the answer is no we don't keep in mind you have to also create a pipeline Right? The students who are now K through
12
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are the future pipeline of scientist and engineers and doctors and we're not doing a very good job with them right now. In terms of their skills. Does this all kind of boil down to Erosion of the promise of the
American
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dream. I think that the promise of the
American
NORP
dream has to be defined and that is is every generation doing better than the previous generation. Do they have the To do better than their parents did and what we have seen over
the last 30 years
DATE
or so maybe
40
DATE
is that median household income in
the United States
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adjusted for inflation has not risen but that is a problem I think it creates a sense of political discord it creates a sense Unease People in
the United States
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one
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States has been one of the global leaders in long-term investment both government investment and infrastructure and also corporate investment in private capital And what we're seeing is that we have fallen short over
the last decade
DATE
or
two
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and we need to be looking at that as well and the
third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government in the economy and let me be very careful in how I express this I believe in markets. I believe that capitalism has worked well in
the United States
GPE
but not unfeathered capitalism. We have benefited from good regulation. Always the best but when we try to protect As a nation. We tend to do much better. We look at some areas in which that kind of solid appropriate regulation may now be coming under some risk and I think that would actually damage long-term economic growth of
the United States
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US
GPE
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the last 30 or 40 years
DATE
has been that we've had faster labor force growth you know it's a very simple
Medic
PERSON
equation Workers, more GDP. Immigration by the way that's not new. This has been a nation of immigrants since it's founding. If we're not viewed as welcoming to talent from around the world. We'll have a problem going Long term growth. When we look at the information from individual companies and industries, we see that there is a labor shortage at all ends. We all know for example that right now, one of the reasons behind the rise in service inflation has to do with an inadequate number of workers At airports. In hotels, in restaurants, and so on The area that I spend a lot of my time looking at is the other end as well do we have enough new scientist do we have enough new engineers do we have enough new doctors and the answer is no we don't keep in mind you have to also create a pipeline Right? The students who are now K through
12
CARDINAL
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the last 30 years
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century
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way we get out of it To focus in on the industries that we think can create jobs that can create good paying jobs and and to protect our workers in that way the long-term problem is staying ahead of the curve making sure that the industries that your supporting are creating jobs and those jobs are paying Enough so that individuals and households feel that they are moving forward. Give me a common earlier about how investment in
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century
DATE
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the 21st century
DATE
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40 year
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first
ORDINAL
place. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest ambassadors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
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century
DATE
. We no longer are part of that is because we are under performing our own Commitment to this area but also other nations have figured it out. In
the 21st century
DATE
, the winning economies, the winning strategies for economic growth, and therefore, enhancing the well being of your people will depend upon whether you're investing. The reality is we just have not Peace withinflation and so if you think about the ability for
Rich American
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to earn a living. How does that kind of play into this longer term concern you have about
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especially when Are not going to be able to invest in the way that they used to under a higher interest rate regime. The the strength of economic growth Long-term prosperity. I'm not talking about stock market prosperity. I'm talking about the prosperity of the people in the nation is very much tied to the health of the middle class Obviously to weather the wage in the incoming increases for those families are adequate and that is something that has been a problem now for
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DATE
in
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where the median household income hasn't kept up So, this is not a new problem. I think what has happened is that this rising inflation has kind of pulled apart the curtains and now we see much more clearly where these problems are and where the issues are. I, for one, I'm happy to see that wages are now rising. I'm happy to That workers have more flexibility and how they wanna conduct themselves and so on. I think that's that's a good start. It's not the end solution. We need to recognize that a
40 year
DATE
problem is not gonna be corrected. In
4 months
DATE
. It's Take longer. Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the Revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
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century
DATE
. We no longer are part of that is because we are under performing our own Commitment to this area but also other nations have figured it out. In
the 21st century
DATE
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40 year
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4 months
DATE
. It' It takes longer. And the
first
ORDINAL
place. Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best and best as you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest ambassadors in the world Would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
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1970
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1980
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40 year
DATE
problem is not gonna be corrected. In
4 months
DATE
. It's Take longer. The bulls get to a place where outrage don't become pandemics in the
first
ORDINAL
place. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest ambassadors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
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1970
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today
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1970
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today
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today
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today
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trillions of dollars
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A lot more devastation. The biggest problem is that there weren't that many lessons that it seems like we really learned as a society that we are in much the same place we were beforehand. There's almost no discourse about a future pandemic and almost no momenta. We don't seem to learn really the core lesson. COVID which was that we were not prepared and that we need to be better prepared. Do you think this is going to put on an economic system in the future? I think that you played out pretty poorly this time when all of a sudden done and I think at the very least you could see a repeat of that where not only did we have massive supply chain problems that were now seeing in retrospect we had massive monetary supply increased try mask over some of
Problems
ORG
. Would have been it probably a devastating economic hit otherwise as COVID winds down and are I economic I I monetary counter measures wind down it becomes clear we never really averted economic impact From COVID. It had massive negative impact. You can look at runaway inflation. You can look at rising interest rates. I slumping economy, slumping markets, and and and that was without, you know, nearly just as they're putting Eat your one that does much more damage and we might not be able to get back to work as a society nearly as quickly or as functionally About in terms of inequality obviously different Were impacted differently both within the
US
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country that is going to affect every country And and and so not only juicy disproportionate dust in less while off countries but that also makes it really hard for the world to stop this spread of pandemics and that means that if there are Or Just read it and grow. When all is said and done, you know, we will have spent Hens of
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with the tens of trillions of dollars incinerated in the
first
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place. The strain on political systems. You saw kind of the masking issue and the lockdowns becoming a really big contention point politically in many governments across the
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first
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place Cut it off way closer to the source That means instead of arguing about masks you know we should have been focusing on how can we get in place I you know good ventilation in the indoor buildings so that there is massively less spread of pandemics through them Would have been a much much healthier You know focus prices as society. This into your own work. I know you've been rising more and more both as a philanthropist and as a political donor. How are you thinking about this risk in terms of how you work ahead? This isn't a
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ended up being I have been spending a fair bit of effort and and and time and in capital on trying to advance you know pandemic prevention I I you know legislation and and policy a lot of the discourse around
You know we will have spent Hens of
trillions of dollars
MONEY
as a world. Trying to contend with the fallout. From COVID, that is a really huge expense. And we're still not done with it. It's a little bit sobering to see the scale of impact of that new combined with the game with just like Not even solving the problem and that's with the workforce that is able to mostly go back to work in person if you have a more deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted productivity declines that Incinerated in the
first
ORDINAL
place. The strain on political systems. You saw kind of the masking issue and the lockdowns becoming a really big contention point politically in many governments across the
US
GPE
and the world. How do you expect that to create a further strain on the system politically? And on many countries Really want to do is nip this in the bud so that you stop you know a pandemic from getting out of control in the
first
ORDINAL
place Cut it off way closer to the source that means instead of arguing about masks you know we should have been focusing on how can we get in place You know good ventilation in indoor buildings So that there is massively less spread of pandemics through them that would have been a much much healthier You know focus prices as a society is there a bipartisan solution and are there ways that you personally are kind of incorporating this into your own work I know you've been rising more and more both as a philanthropist and as a political donor how are you thinking about this risk in terms of how you work ahead this isn't a
one
CARDINAL
party against another I in the way that some debates over some specific
Techniques
ORG
ended up being I have been spending a fair bit of effort and and and time and in capital on trying to advance you know pandemic prevention I I you know legislation and and policy a lot of the discourse around you know COVID and pandemics in general has you know as you serve you know reference Focused on things like masks by the time that's the debate we've already failed at the much more important goal which is avoiding ending up there in the
first
ORDINAL
place by having countermeasures ready beforehand by having early detection systems by Good ventilation in buildings the goals to get to a place where outbreaks don't become pandemics in the
first
ORDINAL
place and where we don't have to shut down you know the economy where people don't have to die where we don't have to make trade offs and hopefully we can you know I think spend you know
tens of billions of dollars
MONEY
Today
DATE
to save
tens of trillions of dollars
MONEY
later on. There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy. Need to catch up. Week on
David Weston
PERSON
. This is a level of uncertainty that we haven't had to deal with. A lot of the satellites have propulsion systems they can kinda move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If you're Lights gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem now.
You combine with the game which is like not even solving the problem and that's with the workforce that is able to mostly go back to work in person if you have a more deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted productivity
Declines
ORG
that sort of tail spin with the tens of trillions of dollars incinerated in the
first
ORDINAL
place. The strain on political systems. You saw kind of the masking issue and the lockdowns becoming a really big contention point politically in many governments across the
US
GPE
and the world. How do you expect that to create a further strain on the system politically? Hey and On on you know the
USA
GPE
you said it and on many countries So that you stop you know pandemic from getting out of control in the
first
ORDINAL
place Cut it off way closer to the source that means instead of arguing about masks you know we should have been focusing on how can we get in place You know good ventilation in indoor buildings So that there is massively less spread of pandemics through them that would have been a much much healthier You know focus prices a society is there a bipartisan solution and are there ways that you personally are kind of incorporating this into your own work I know you've been rising more and more both as a philanthropist and as a political donor how are you thinking about this risk in terms of how you work ahead this isn't a
one
CARDINAL
party against another I in the way that some debates over some specific Trying to advance you know pandemic prevention I I you know legislation and and policy a lot of the discourse around you know COVID and pandemics in general has you know as you serve you know reference Focused on things like masks by the time that's the debate we've already failed at the much more important goal which is avoiding ending up there in the
first
ORDINAL
place by having countermeasures ready beforehand by having early detection systems by Good ventilation in buildings the goals to get to a place where outbreaks don't become pandemics in the
first
ORDINAL
place and where we don't have to shut down you know the economy where people don't have to die where we don't have to make trade offs and hopefully we can you know I think spend you know
tens of billions of dollars
MONEY
Today
DATE
to save
tens of trillions of dollars
MONEY
later on. There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy. Need to catch up. We've got the information and insights. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. A lot of the satellites have propulsion systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines yeah we offer a collision avoidance survey it's a subscription service we'll send you an alert
up to 7 days
DATE
in advance if you're It's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloud a debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up So
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you?
With the workforce that is able to mostly go back to work in person if you have a more deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted productivity declines that sort of talespin with the tens of trillions of dollars Incinerated in the
first
ORDINAL
place. Political systems. Becoming a really big contention point politically in many governments across the
US
GPE
and the world. How do you expect that to create a further strain on the system politically? I'm I'm Countries. What to do is dip this in the bud so that you stop you know a pandemic from getting out of control in the
first
ORDINAL
place. You know cut it off way closer to the source Instead of arguing about masks you know we should have been focusing on how can we get in place You know good ventilation in indoor buildings So that there is massively less spread of pandemics through them that would have been a much much healthier You know focus prices of society. This into your own work. I know you've been rising more and more both as a philanthropist and as a political donor. How are you thinking about this risk in terms of how you work ahead? This isn't a
one
CARDINAL
party against another Everything I in the way that some debates over some specific Trying to advance you know pandemic prevention I I you know legislation and in policy a lot of the discourse around you know COVID and pandemics in general has you know as you serve you know reference Focused on things like masks by the time that's the debate we've already failed at the much more important goal which is avoiding ending up there in the
first
ORDINAL
place by having countermeasures ready beforehand by having early detective systems by Good ventilation in buildings the goals to get to a place where outrage don't become pandemics in the
first
ORDINAL
place and where we don't have to shut down you know the economy where people don't have to die where we don't have to make trade offs and hopefully we can you know I think spend you know
tens of billions of dollars
MONEY
today
DATE
to save
tens of
CARDINAL
one 1 trillion Later on. There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy. Need to catch up. Week I'm
David Weston
PERSON
. From business's most influential and instrumental. This is a level of uncertainty that we haven't had to deal with. Television and radio A lot of the satellites have propulsion systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offer to help these companies know how to maneuver their machines Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. So much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up So
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most? Front of us right now is is I think deglobalization you're gonna see
Trying to advance you know, pandemic prevention. I you know, legislation and and policy a lot of the discourse around, you know, COVID in pandemics in general has, you know, as you serve, you know, reference, focused on things like masks by the time that's the debate. We've already failed. Ready beforehand by having early detective systems by having good ventilation in buildings the goals to get to a place where outreach don't become pandemics and the
first
ORDINAL
place and where we don't Where we don't have to make trade offs and hopefully we can you know I think spend you know
tens of billions of dollars
MONEY
today
DATE
to save
tens of trillions of dollars
MONEY
later on There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy. Need to catch up. Week on
David Weston
PERSON
. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. A lot of the satellites have propulsion systems. They can kinda move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If
Satellite
PERSON
's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a clouded debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up So,
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most?
One
CARDINAL
of us right now is is I think
DeGlobalization
ORG
you're gonna see Nation states look internally and make sure that they have the ability Support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglogalization phenomenon started before that? Well, I think it did start before it. All you have to do is look at
Brexit
PERSON
. I mean, the idea for
Brexit
PERSON
started, I think it's now
7 or 8 years ago
DATE
It didn't happen until
2020
DATE
but that's the beginning Think where you see in the war finale is let's just take an An exemplary Figuring this
Germany
GPE
So
Germany
GPE
strategy up to this point was to outsource their To
the United States
GPE
to outsource their financial management to the
EU
ORG
. They outsource their energy supply to
Russia
GPE
And they also they're in market to
China
GPE
. This was the complete globalization of an economy and you can see at this point, I think they're in extreme trouble. So, if you think that deglobalization is the next big risk, what's at stake from countries detaching themselves from each other? What really is the problem with For
a few decades
DATE
we were able to outsource to the cheapest labor markets we were able to rely on each other for goods that that really throughout history and I I do think part of this is going back and reading history most countries would not outsource items that were very important to their well being food being one And I think energy being one that's showing up is to be extremely important What's gonna happen now is I think each society is gonna have to think about did I did i outsource something that That I'm not comfortable with. How is this even possible to fully become the globalized when so many.
Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now. Cuz we've installed so much more hardware in the space. Are you have a big collision it creates a clouded debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up So,
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most?
One
CARDINAL
of us right now is is I think
DeGlobalization
ORG
you're gonna see Nation states look internally and make sure that they have the ability Support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglogalization phenomenon started before that? Well, I think it did start before. All you have to do is look at
Brexit
PERSON
. I mean, the idea for
Brexit
PERSON
started, I think it's now
7 or 8 years ago
DATE
It didn't happen until
2020
DATE
but that's the beginning Think what you see in the war finale is let's just take an An exampleary Figure in this
Germany
GPE
So
Germany
GPE
strategy up to this point was the outsourced their To
the United States
GPE
to outsource their financial management to the
EU
ORG
. They outsource their energy supply to
Russia
GPE
And they also they're in market to
China
GPE
. This was the complete globalization of an economy and you can see at this point, I think they're in extreme trouble. Is the next big risk. What's at stake from countries detaching themselves from each other? What really is the problem with that For
a few decades
DATE
, we were able to outsource to the cheapest labor markets. We were able to rely on each other for goods that that really throughout history and I I do think part of this is going back and reading history. Most countries would not outsource items that were Important to their well being food being one of them and I think energy being one that's showing up is to be extremely important What's gonna happen now is I think each society is gonna have to think about did I did I outsource something that That I'm not comfortable with. How is this even possible to fully become the globalized when so many nations rely on others? It's not that every nation is rich with oil or rich with nickel. With food resources events. For those of us in
the United States
GPE
, we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position where it does not have energy supplies. It turned off its nuclear. It's right at the center and near the war and and the ramifications. We're seeing the elements of deglobalization and it's cost. To ordinary people elaborate on that you should cause to ordinary people what are the cost how else are you seeing a play out throughout history food is always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supply, supply, supply chains, Horrified by the war and the invasion but i think the The motivations and the and the rational and what's happening behind it are gonna highlight to people can I provide the basics each country will move to protect their own citizens and as a result they might deglobilize ahead of you there are populations all over the world that we're not aware of but they wanna eat and they Be heated in the winter and by the way they want access to cheap electricity And all these things are going through the roof until the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food goods. I mean, we're talking about Part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
weed fields and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from
So
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most? Front of us right now is is I think de globalization you're gonna see in a nation states look internally and make sure that they have the ability To support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglogalization phenomenon started before that? Well, I think it did start before it. All you have to do is look at I mean the idea for
Brexit
PERSON
started I think it's now
7 or 8 years ago
DATE
it didn' Happened til 2020 but that's the beginning Think what you see in the war finale is let's just take an An exemplary Figure in this
Germany
GPE
So
Germany
GPE
strategy up to this point was to outsource their To
the United States
GPE
to outsource their financial management to the
EU
ORG
they outsource their energy supply to
Russia
GPE
And they also they're in market This was the complete globalization of an economy and you can see at this point I think they're in extreme trouble. Is the next big risk. What's at stake from countries detaching themselves from each other? What really is the problem with that For
a few decades
DATE
, we were able to outsource to the cheapest labor markets. We were able to rely on each other for goods that that really throughout history and I do think part of this is going back and reading history. Most countries would not outsource items that were very important to their well being, food, being one of them And I think energy being one that's showing up is to be extremely important what's gonna happen now is I think each society is gonna have to think about did I did I outsource something that That I'm not comfortable with. How is this even possible to fully become the globalized when so many nations are rely on others? It's not that every nation is rich with oil or rich with nickel or rich with food resources events. For those of us in
the United States
GPE
, we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position where it does not have energy supplies. It turned off it's nuclear. It's right at the center and near the war and and the ramifications. We're seeing the elements of deglobilization and it's cost. To ordinary people. What are the costs? How else are you seeing a play out? Throughout history, food is always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supply, supply, supply chains, Horrified by the war and the invasion but i think the The motivations and the and the rational and what's happening behind it are gonna highlight to people can I provide the basics each country will move to protect their own citizens and as a result they might deglobilize ahead of you there are populations all over the world that we're not aware of but they wanna eat and they Be heated in the winter and by the way they wanna access the cheap electricity And all these things are going through the roof and to the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food cuz I mean we're talking about part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
weed fields and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from From from having insurrection we saw it again in
Sri Lanka
GPE
over
the weekend
DATE
you're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action To get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one
1 billion
CARDINAL
of them, let's say roughly or in
Western Europe
LOC
and the
US
GPE
. And we've set in course a policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that's
So,
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most? Front of us right now is is I think de globalization you're gonna see in a nation states look internally and make sure that they have the ability To support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglogalization phenomenon started before that? Well, I think it did start before. All you have to do is look at I mean the idea for
Brexit
PERSON
started I think it's now
7 or 8 years ago
DATE
It didn't happen until
2020
DATE
but that's the beginning Think what you see in the war finale is let's just take an An exemplary Figure in this
Germany
GPE
So
Germany
GPE
strategy up to this point was to outsource their To
the United States
GPE
to outsource their financial management to the
EU
ORG
. They outsource their energy supply to
Russia
GPE
And the answer is they're in market to
China
GPE
This was the complete globalization of an economy and you can see at this point I think they're in extreme trouble. Is the next big risk. What's at stake from countries detaching themselves from each other? What really is the problem with that happening For
a few decades
DATE
, we were able to outsource to the cheapest labor markets. We were able to rely on each other for goods that that really throughout history and I I do think part of this is going back and reading history. Most countries would not outsource items that were very important to their well being, food, being one of them And I think energy being one that's showing up is to be extremely important What's gonna happen now is I think each society is gonna have to think about Hey did I outsource something that I'm not comfortable with. How is this even possible to fully become deglobalized when so many nations rely on others? It's not that every nation is rich with oil or rich with nickel or rich with food resources events. For those of us in
the United States
GPE
, we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position where it does not have energy supplies. It turned off it's nuclear. It's right at the center and near the war and and the ramifications. We're seeing the elements of deglobalization and it's cost. To ordinary people. Elaborate on that. You should cost to ordinary people. What are the costs? How else are you seeing a play out? Throughout history, food has always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supply, supply chains, Horrified by the war and the invasion but i think the The motivations and the and the rational and what's happening behind it are gonna highlight to people. Can I provide the basics? Each country will move to protect their own citizens. And as a result, they might deglobilize ahead of you. There are populations all over the world that we're not aware of but they wanna eat and they Be heated in the winter and by the way, they want access to cheap electricity. And all these things are going through the roof and to the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food goods. I mean, we're talking about part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
Weedfields and
Russia
GPE
was a gigantic exporter of wheat. This is the basic food ingredients that keeps people from From from having insurrection we saw it again in
Sri Lanka
GPE
over
the weekend
DATE
you're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action To get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one
1 billion
CARDINAL
of them, let's say roughly or in
Western Europe
LOC
and the
US
GPE
. And we've set in course policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that
six 1 billion
QUANTITY
people
Two 1 billion
MONEY
it subsharing
Africa
LOC
.
Think about did I did I outsource something that That I'm not comfortable with. How was this even possible to fully become the globalized when so many nations rely on others? It's not that every nation is rich with oil or rich with nickel. With food resources events. For those of us in
the United States
GPE
, we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position where it does not have energy supplies. It turned off its nuclear. It's right at the center and near the war and and the ramifications were seeing the elements of deglobalization and it's cost. To ordinary people. What are the costs? How else are you seeing a playout? Throughout history, food is always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supply, supply chains, Horrified by the war and the invasion but i think the The motivations and the and the rational and what's happening behind it are gonna highlight to people. Can I provide the basics? Each country will move to protect their own citizens. And as a result, they might deglobilize ahead of you. There are populations all over the world that we're not aware of but they wanna eat. And they Be heated in the winter and by the way, they want access to cheap electricity. And all these things are going through the roof and to the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food cuz I mean we're talking about part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
weed fields and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from Rioting from from having insurrection. We saw it again in
Sri Lanka
GPE
over
the weekend
DATE
. You're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action to get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one
1 billion
CARDINAL
of them. Let's say roughly or in
Western Europe
LOC
and the And we've set in course policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that
six 1 billion
QUANTITY
people
Two 1 billion
MONEY
it subsaver in
Africa
LOC
During
Asia
LOC
are still trying to reach middle class We raise their energy costs dramatically I don't think they're gonna be you know they're not gonna be happy about that and I I think the Arab
Spring
DATE
fundamentally started over food prices and their basic instinct and need is to feed heat cloth and take care of their family. So what are the forces that are reversing
decades
DATE
of globalization? Well Might be just the safety of the supply chains and possibly the actions by
Russia
GPE
are a highlight to that but again go back to
Brexit
PERSON
decision By the
UK
GPE
people Vote to take back some of there also they had outsourced their labor forced to central
Europe
LOC
and they had started to make a decision to pull it back for whatever reasons they didn't like outsourcing again outsourcing your financial management To the
EU
ORG
and the
ECB
ORG
. You mentioned the outsourcing of financial assets. On
one
CARDINAL
hand I'm wondering what impact do the sanctions have. Some of our policy moves here are gonna have very long term ramifications. In this environment, we've frozen the bank reserves of
Russian
NORP
bank And if you don't think that every single Maybe not every single but there's substantial number
Finance
ORG
ministers around the world have to rethink Where are there as had secure I've had many people ask me What do I do if my assets in
China
GPE
? What do I do with my assets in
Hong Kong
GPE
? There's a lot of there's a lot of western investment in
Hong Kong
GPE
residual. Happens if we end up in a similar
Ukrainians
NORP
and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from From from having insurrection we saw it again in
Sri Lanka
GPE
over
the weekend
DATE
you're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action To get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one
1 billion
CARDINAL
of them, let's say roughly or in
Western Europe
LOC
and the
US
GPE
. And we've set in course policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that
six 1 billion
QUANTITY
people
Two 1 billion
MONEY
it subsharing
Africa Asia
LOC
are still trying to reach middle class and if we raise their energy costs dramatically I don't think they're gonna be you know they're not gonna be happy about that and I I think the Arab
Spring
DATE
fundamentally started over food prices and their basic instinct to need is to feed heat cloth and take care of their family. So what are the forces that are reversing
decades
DATE
of
Globalization
ORG
. Well, it might be just the safety of the supply chains and possibly the actions by
Russia
GPE
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EU
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hand I'm wondering what impact do the sanctions have some of our policy moves here are gonna have very long term ramifications in this environment we've frozen the bank reserves of
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residual. Happens if we end up in a similar disagreement or conflict are those assets subject to immediate abandonment these are questions everybody's gonna ask whether they talk about them a lot or not they're gonna be asked I'm not saying we'll go to
100%
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investment in your own country but boy the risk
Premium
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night
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? There's a possibility I think this leads to revolution in populations that do not have control over there food and energy and in a world that we live in, like it or The the change in the world toward cheap energy
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fundamentally started over food prices and their basic instinct and need is to feed heat cloth and take care of their family. The forces that are reversing
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of
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one
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hand I'm wondering what impact do the sanctions have. Some of our policy moves here are gonna have very long term ramifications in this environment. We've frozen the bank reserves of
Russian
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bank And if you don't think that every single Maybe not every single but there's substantial number of finance ministers around the world have to rethink Where are there as a secure? I've had many people ask me What do I do if my assets in
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night
TIME
? There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy and in the world that we live in like it or not the the change in the world toward cheap energy mobilization cars oil gas is used for clothing it's used for significant amount of products and again food is food and I get concerned as to what can happen in these these Countries If if oil and gas does get to be $
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Supply
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fundamentally started over food prices and their basic instinct in need is to feed heat cloth and take care of their family. Forces that are reversing
decades
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of
Globalization
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Russia
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UK
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Europe
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EU
ORG
and the
ECB
ORG
. You mentioned the outsourcing of financial assets. On
one
CARDINAL
hand I'm wondering what impact do the sanctions have. Some of our policy moves here are gonna have very long term ramifications in this environment we've frozen the bank reserves of
Russian
NORP
bank re And if you don't think that every single Maybe not every single but there's substantial number Of finance ministers around the world have to rethink Where are there as a secure? I've had many people ask me What do I do if my assets in
China
GPE
? What do I do with my assets in
Hong Kong
GPE
? There's a lot of there's a lot of western investment in
Hong Kong
GPE
residual. Happens if we end up in a similar disagreement or conflict are those assets subject to immediate unbandonment these are questions everybody's gonna ask whether they talk about them a lot or not they're gonna be asked I'm not saying we'll go to
100%
PERCENT
investment in your own country but boy the risk premium has significantly gone up. I mean, is this just a giant politicalization of assets around the world? As you see it, given that now, governments are getting involved in a much more Way in terms of the resources that they own oversee and trade. Companies. We've had to abandon assets immediately because of a political because of a conflict. So now you have to anticipate where in the world might we not like the activities of a future You can come up with a long list of where you might be uncomfortable and you have to truly change your your wrist profile there. So, we're in the middle of seeing a very effective use. Weaponization of resources. Now, not everybody can weaponize the resources because they don't have They don't have enough resources. So, to the extent that this is the biggest risk you see on the horizon over the the medium to long term. What about it really keeps you up at
night
TIME
? There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy and in the world that we live in like it or not The change in the world toward cheap energy
Asian
NORP
cars oil gas is used for clothing it's used for significant amount of products and again food it's food and I get concerned as to what can happen in these these If if oil and gas does get to be $
200
MONEY
a barrel And if The supply the actual food supply gets disintermediated I think you could have ramifications we haven't we haven't seen now I'm not I'm pretty bullish on the world so I think people think you're these things out but I I think the quicker The world focuses on it and and admits that they have to supply and be independent of global trade in his best way they can the better for their populations.
What do I do with my assets in
Hong Kong
GPE
? There's a lot of there's a lot of western investment in
Hong Kong
GPE
residual. Happens if we end up in a similar disagreement or conflict are those assets subject to immediate unbandonment. These are questions everybody's gonna ask whether they talk about them a lot or not. They're gonna be asked I'm not saying we'll go to
100%
PERCENT
investment in your own country but boy the risk premium has significantly gone up. I mean, is this just a giant literization of assets around the world? As you see it, given that now, governments are getting involved in a much more Way in terms of the resources that they own oversee and trade. Companies. We've had to abandon assets immediately because of a political because of a conflict. So now you have to anticipate where in the world might we not like the activities of a future You can come up with a long list of where you might be uncomfortable and you have to truly change your your risk profile there so we're in the middle of seeing a very effective use. Of the weaponization of resources. Now, not everybody can weaponize the resources because they don't have They don't have enough resources. So, to the extent that this is the biggest rescue see on the horizon over the the medium to long term. What about it really keeps you up at
night
TIME
? There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy and in a world that we live in like it or not the the change in the world toward cheap energy, mobilization, cars, oil gases used for clothing, it's used for significant amount of products, and again, food, it's food, and I get concerned as to what can happen in these these Countries If if oil and gas does get to be $
200
MONEY
a barrel And if The supply, the actual food supply gets disintermediated. I think you could have ramifications. We haven't, we haven't seen. Now, I'm not, Bullish on the world so I think people figure these things out but I I think the quicker The world focuses on it and and it meets that they have to supply and be independent of global trade in its best way they can the better for their populations. The world like
bloomberg
PERSON
. In
the coming months
DATE
do you see that coming The moment news breaks
24 hours
TIME
a day.
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PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Analyze markets You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Companies know they're getting
hundreds
CARDINAL
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of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or rob Gonna decide whether or not a human ever gets their eyes on it. That might not be totally inclusive or not.
$
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bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming Where are the job cuts to come from?
More than 120
CARDINAL
countries the moment news breaks
24 hours
TIME
a day
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or robot
Gon
ORG
na decide whether or not a human ever gets their eyes on it. How this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
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needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
EVENT
? So Life, you're the CEO of Roblox but on
Roblox
PERSON
, you're builder man. Maybe. You know that name we just started up
2 weeks
DATE
after we launched and we're all picking our own usernames Everyone picked one I just said You've had the same avatar since
2004
DATE
. That's right. That's awesome. Do you still play? I do. I wish I could play the whole day. I have to be a CEO. I'm probably on everyday but not as much as I would like. I have
four
CARDINAL
kids. I love all of those. I have a bit of a theory. I have
four
CARDINAL
kids. Oh, you do? Yeah, they're now, Growing up watching me do this. Yeah. Another, they're pretty savvy, social media people, but I'm optimistic someday. They're gonna be using
Roblox
PERSON
for some other reason. Like communicating or more working or something like that. And then they're gonna be, oh gosh, I was like forest to be on robots. It's a Port Monto of robots and blocks.
No one covers the world like
bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming
Taiwan
GPE
and
China
GPE
. We will not just cut and run. The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now Type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Analyze markets You can enter phrases. Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications. So softwares come in to automate the process. You wanna write your resume for robots not for humans. The only job your resume has is to be comprehensible to the software that is reading it because that software or robot
Gon
ORG
na decide whether or not a human ever gets their eyes on it. Bio certain segment of the population that might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? So in real life you're the CEO of Roblox but on Roblox you're builder man. Maybe You know that name we just started up when is maybe
2 weeks
DATE
after we launched and we're all picking our own usernames and everyone picked one I just said no they're mad so you've had the same avatars since
2004
DATE
that's right that's awesome do you still play? I do. I wish I could play the whole day. I have to be Yeah. I'm probably on every day but not as much as I would like. I have
four
CARDINAL
kids. Who's on Roblox a lot. He said, his favorite games are the Tycoon games. Lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory. I have
four
CARDINAL
kids. Oh, you do? Yeah, they're now in they've grown up watching me do this. Yeah. Another, they're pretty savvy, social media people, but I'm optimistic someday. They're gonna be using Roblox Other reason like communicating or more working or something like that and then they're gonna be oh gosh it's like forest to be on robots. It's a Port Monto of robots and blocks where users can build and play games in a 3d world. Has boo into a global online gaming jogger knot that kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact roadblocks was building the metaverse long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. But what does the future matters really look like and how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co founder
David Buzuki
PERSON
No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials Find people Analyze Marcus. You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or robot
Gon
ORG
na decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. TC I think
four
CARDINAL
most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? So in real life you're the CEO of Roblox but on Roblox you're builder man. Maybe You know that name we just started up
2 weeks
DATE
after we launched and we're all picking our own usernames And everyone picked one I just said You've had the same avatars since
2004
DATE
. That's right. That's awesome. Do you still play? I do. I wish I could play the whole day. I have to be a CEO. I'm probably on everyday but not as much as I would like. I have
four
CARDINAL
kids. A lot. He said, his favorite games are the tycoon games. Oh, lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory.
Four
CARDINAL
kids. Oh, you do. Now it they've grown up watching me do this. Yeah. Another they're pretty savvy social media people. But I'm optimistic someday. They're gonna be using
Roblox
PERSON
for some other reason. Like communicating or more working or something like that. And then they're gonna be oh gosh. I was like forest to be on robots. It's a Port Monto of robots and blocks where users can build and play games in a 3d world. Global online gaming juggernaut that kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact roadblocks was building the metaphors long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. And how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roblox CEO and co founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be.
Gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FDC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate a eye? So in real life you're the CEO of Roblox but on Roblox you're builder man. You know that name it we just thought it up when there's maybe
2 weeks
DATE
after we launched and we're all picking our own usernames Everyone picked one. I just said, no, they're mad. So, you've had the same avatars since
2004
DATE
. That's right. That's awesome. Do you still play? You. I wish I could play the whole day. I have to be a CEO. So how often do you play? I'm probably on everyday but not as much as I would like. I have
four
CARDINAL
kids. I have a
9 year old
DATE
son who's on roadblocks a lot. He said his favorite games are the tycoon games. Oh lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory. Have
four
CARDINAL
kids. Oh, you do. Now it they've grown up watching me do this. Yeah. Another they're pretty savvy social media people. But I'm optimistic someday. They're gonna be using
Roblox
PERSON
for some other reason. Like communicating or more working or something like that. And then they're gonna be oh gosh. I was like forest to be on robots. It's a Port Monto of robots and blocks where users can build and play games in a 3d world roadblocks has boobed into a global online gaming juggerna Kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact
Roblox
PERSON
was building the
Mediverse
PERSON
long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. Civil society within it that keeps kids safe. Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co-founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. I'm a mom and so I'm been really excited to have this conversation. For parents and anyone out there who still doesn't quite What exactly are kids doing on
Rob Yeah
PERSON
kids on Roblox aren't just playing they're learning they're hanging out together Can't be together in real life. They're hanging out on roadblocks. They Playing hiding goes sick they could be pretending they're running a store or a pizza parlor they could be making the next big game or adventure so it's really a wide range of things and it involves doing things together pretending you're together so right now it's Games or experiences
four
CARDINAL
kids by kids how old are these players how old are these developers we have young players who are getting interested in coding who are getting interested in designing things but more and more the community on roadblocks has blossomed into this super rich System
thousands
CARDINAL
of developers making a living on the platform some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
a year so how many of these developers are really kids and how many of these Are now grown ups. Yeah, well, think
two 1 million
QUANTITY
plus developers. A lot of them are grown ups and more and more. In addition to the natural organic people that started on roadblocks, we're starting up studios come in on the platform as well. Professional game developers who are developing on other platforms starting to take a look So our developer demo A little bit older although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know,
It's a port monto of robots and blocks where users can build and play games in a 3d world. Global online gaming juggernaut that kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact roadblocks was building the metaphors long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. But what does the future metaverse really look like and how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roblox CEO and co founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. I'm a mom and so I'm been really excited. To have this conversation. For parents and anyone out there who still doesn't quite understand. What exactly are kids doing on
Roblox
PERSON
? Yeah, Kids on Roblox aren't just playing they're learning they're hanging out together They can't be together in real life. They're hanging out on roadblocks. They could be playing hiding, go seek, they could be pretending they're running a store or a pizza parlor. They could be making the next big game or adventure. It's really a wide range of things and it involves doing things together, pretending you're together. So, right now, it's mostly Or experiences
four
CARDINAL
kids by kids. How old are these players? How old are these developers? We have young players who are getting interested in coding, who are getting interested in designing things, but more and more the community on roadblocks has blossomed into this super rich eco
Thousands
CARDINAL
of developers making a living on the platform. Some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
a year. So, how many of these developers are really kids and how many of these developers Grown ups. Yeah, well, think
two 1 million
QUANTITY
plus developers. A lot of them are grown ups and more and more. In addition to the natural organic people that started on roadblocks, we're starting up studios come in on the platform as well. Professional game developers who are developing on other platforms starting to take a look at it. So, our Over demo A little bit older although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, muscling Does that change the dynamic of the platform? I I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever. By
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal Would ever think of but when developed by young creator, you know, we're gonna be, we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it or there's gonna be a lightning storm. Like that kind of stuff. We see a lot of that creative game play coming from the younger developers. What were you into as a kid? Were you I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time. It was out in the boonies from
Minneapolis
GPE
,
Minnesota
GPE
. There were sandpits and so We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods. The
one
CARDINAL
key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time. And that kinda got me interested in this I also heard you were the captain of your high school TV quiz team. Yeah, so think of think of
Minnesota
GPE
in the
1970
DATE
's and
80s
DATE
where
every weekend
DATE
,
two
CARDINAL
different schools compete,
four
CARDINAL
students from each school, you know, and a really funny
four
CARDINAL
by
four
CARDINAL
configuration on a Had a pretty good quiz bowl team. You eventually made it to silicon
Valley
LOC
. Yeah. Went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid and you coming to life. Yeah, you know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting, took
a few months
DATE
off, and I got really excited about there's this whole blossoming educational.
That keeps kids safe. Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. Really excited to have this conversation. For parents and anyone out there who still doesn't quite What exactly are kids doing on
Rob Yeah
PERSON
kids on Roblox aren't just playing they're learning they're hanging out together Can't be together in real life. They're hanging out on roadblocks. They Playing hiding goes sick they could be pretending they're running a store or a pizza parlor they could be making the next big game or adventure so it's really a wide range of things and it involves doing things together pretending you're together so right now it's Games or experiences
four
CARDINAL
kids by kids how old are these players how old are these developers we have young players who are getting interested in coding or getting interested in designing things but more and more the community on roadblocks has blossomed into this super rich System
thousands
CARDINAL
of developers making a living on the platform some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
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of my favorite experiences is natural disasters. It's been on the platform By
one
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of our early developers. It's not the kind of thing that I I think a normal studio would ever think of. But when developed by young creator, you know, we're gonna be we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it. Developers what were you into as a kid were you a gamer I was kind of a nerd when I was a kid I was studied really hard I luckily grew up in
Eden Prairie Minnesota
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at the time it was out in the boo There were sandpits and so we did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods. The
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key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time. And that kinda got me
Dead
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four
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configuration on a quiz bowl thing and so yeah eating puri had Good quiz ball team. You eventually made it to
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. Yeah. You went to
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. You started a company called
Knowledge Revolution in the 80s
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where users could create and test physics experiments. That's right. The science kid and you coming to life. You know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting. Took
a few months
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off and I got really excited about there's this whole blossoming educational software, marketplace, the
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had just been introduced and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software was very So when we looked at physics it was a whole different idea could we make a wide open labratory we could build anything any physics experiment bring it to life measure it see what it feels like you sold that company made some money became an investor and you invested in Oh yeah, wow. I I had a friends to account. I'm dating myself a little bit. But I had a friend.
Roblox CEO and co founder
David Buzuki
PERSON
. David's so great to have you here. I really appreciate it and it's wonderful to be with you. Well, I'm a parent, I'm a mom, and so I'm been really excited. To have this conversation. For parents and anyone out there who still doesn't quite What exactly are kids doing on
Rob Yeah
PERSON
kids on Roblox aren't just playing they're learning they're hanging out together Can't be together in real life they're hanging out on roadblocks they Playing hiding goes sick they could be pretending they're running a store or a pizza parlor they could be making the next big game or adventure so it's really a wide range of things and it involves doing things together pretending you're together so It's mostly Or experiences
four
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kids buy kids how old are these players how old are these developers we have young players who are getting interested in coding who are getting interested in designing things but more and more the community on roadblocks is blossom into this super rich eco Them
thousands
CARDINAL
of developers making a living on the platform some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
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two 1 million
QUANTITY
plus developers a lot of them are grown ups and more and more in addition to the natural organic people that started on roadblocks we're starting up studios come in on the platform as well professional game developers who are developing on other platforms starting to take a look at So our developer demo A little bit older although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, muscl I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever. By
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal studio would ever think of. When developed by young creator you know we're gonna be we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it. There's gonna be a lightning storm. Like that kind of stuff. We see a lot of that creative game play coming from the younger developers. Are you into as a kid? Were you a gamer? I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time it was out in the boonies from
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Minnesota
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. There were sandpits and so We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods. The
one
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key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time. And that kinda got me interested in this I also heard you were the captain of your high school TV quiz team. Yeah, so think of think of
Minnesota
GPE
in
the 19 And 80s
DATE
where
every weekend
DATE
two different schools compete
four
CARDINAL
students from each school you know and a really funny
four
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by
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configuration on a quiz bowl thing so yeah eating puri had a pretty
Quiz
PERSON
ball team. You eventually made it to silicon
Valley
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. Yeah. Went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid and you coming to life. You know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting. Took
a few months
DATE
off and I got really excited about there's this whole blossoming educational software marketplace at the
McIntosh
ORG
. It just been introduced and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software was very So when we looked at physics it was a whole different idea could we make a wide open labratory we could build anything any physics experiment bring it to life measure it see what it feels like you sold that company made some money became an investor and you invested in Oh yeah, wow. I I had a friends to account. I'm dating myself a little bit. But I had a friend to account. I'm curious what you learn from
the early days
DATE
of social media.
This is young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, muscling in, Does that change the dynamic of the plaque? I I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever. By
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal Would ever think of but when developed by young creator, you know, we're gonna be, we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it. There's gonna be a lightning storm. Like that kind of stuff. We see a lot of that creative game play coming from the younger developers. What were you into as a kid? Were you a game I was kind of a nerd when I was a kid I was studied really hard I luckily grew up in
Eden Prairie Minnesota
LOC
at the time it was out in the boonies from
Minneapolis
GPE
Minnesota
GPE
there were sandpits and We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods that
one
CARDINAL
key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time and that kinda got me interested in this I also heard you were the captain of your high school TV quiz team. Yeah, so think of think of
Minnesota
GPE
in the
1970
DATE
's and
80s
DATE
where
every weekend
DATE
,
two
CARDINAL
different schools compete,
four
CARDINAL
students from each school, you know, and a really funny
four
CARDINAL
by
four
CARDINAL
configuration on a Had a pretty good quiz bowl team. You eventually made it to silicon
Valley
LOC
. Yeah. Went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid in you coming to life Yeah, you know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting, took
a few months
DATE
off, and I got really excited about there's this whole blossoming educational software, marketplace, the
McIntosh
ORG
, it just been introduced, and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software was So when we looked at physics it was a whole different idea could we make a wide open labratory rebuild anything any physics experiment bring it to life measure it see what it feels like you sold that company made some money became an investor and you invested in Oh, yeah. Wow. I I had a friends through account. I'm dating myself a little bit. But I had a friends to account. I'm curious what you learn from
the early days
DATE
of social media. Yes, so one thing I learned is it was really fun to invest but it's not my sweet spot. Like my sweet spot is trying to build and create things. I remembered, I think Having account
number 79
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on friends their and just seeing that wonderful thing of finding other people friend and friend playing around with that early user interface it's a little bit almost thinking of interactive physics where we were simulating the world and then They're seeing how important social is. Those are a couple of the components that have come together in roadblocks. So, when you start a Roblox in
2004
DATE
, what was the idea back then? The feeling of this new category for me started feeling almost inexerable. Category that people have been talking about in
sci
ORG
fi for
many many years
DATE
. We've seen futurist talk about it. We've seen a lot of movies. We were thinking yes, a massive threeD co experience. Kids flocked to
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PERSON
during a pandemic You went public in the middle of the pandemic
2021
CARDINAL
45 1 billion dollars
MONEY
market cap we spoke on that day even you have said that kind of growth won't keep up what kind of growth can we expect from roblox in Normal times. Ever is gonna be a part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people. So they're gonna go to school. If I happen to be taking my science class and I can't get into the classroom and we're dissecting a frog. We'll probably dissect the frog in something like
Roblox Simulation
FAC
which I think's gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the world, some of us will be in the office, some won't. Having a common threeD
Went to school had a couple hard years with jobs that weren't really that exciting took
a few months
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off and I got really excited about there's this whole blossoming educational software marketplace at the
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it just been introduced and it was just really
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. I did a survey of all of that and a lot of the educational software was very pre canned. So, when we looked at physics, it was a whole different idea. Could we make a wide open labratory? We could build anything, any physics, experiment, bring it to life, measure it, see what it feels like. You sold that company, made some Became an investor and you invested in Oh yeah, wow. I I had a friends to account. I'm dating myself a little bit. But I had a friend to work out. I'm curious what you learn from
the early days
DATE
of social media. Yeah, so one thing I learned is it was really fun to invest but it's not my sweet spot. Like my sweet Trying to build and create things. I remembered, I think having account
number 79
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on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interactive physics where we were sim The world and then friends they're seeing how important social is those are a couple of the components that have come together in roadblocks so when you start a roadblocks in
2004
DATE
what was the idea back then the feeling of this new category for me started feeling almost inexerable it's Category that people have been talking about in
sci
ORG
fi for
many many years
DATE
. We've seen futurist talk about it. We've seen a lot of movies. We were thinking yes immersive 3d co experience. Kids flocked to Roblox during a pandemic. You went public in the middle of the
2021
DATE
,
45 1 billion dollars
MONEY
market cap. We spoke on
that day
DATE
. Even you have said that kind of growth won't keep up. What kind of growth can we expect from
Roblox
PERSON
? In normal times. Be a part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school, how people. So they're gonna go to school in
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PERSON
. If I happen to be taking my science class and I can't get into the classroom and we're dissecting Dissect the frog in something like roadblocks and a simulation which I think is gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the world, some of us will be in the office, some won't Having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipitous thing where we both happen to go over and chat. I think also is gonna be very big Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Access the financial world on demand. Here from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Microsoft
ORG
Sacha
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universities and later at the business world. Meanwhile, the belief in
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on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interactive physics where we're simulating the world and then friends, they're seeing how Those are a couple of the components that have come together in roadblocks. So, when you start a Roblox in
2004
DATE
, what was the idea back then? The feeling of this new category for me started feeling almost inexerable. It's a category that people have been talking
Sci
PERSON
fi for
many many years
DATE
. We've seen futurist talk about it. We've seen a lot of movies. We were thinking yes immersive 3d co experience. Kids flocked to Roblox during a pandemic. You went public in the middle of the Make 2021
45 1 billion dollars
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market cap. We spoke on
that day
DATE
. Even you have said that kind of growth won't keep up. What kind of growth can we expect from
Roblox
PERSON
? In normal times. Part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people. So they're gonna go to school in
Roblox
PERSON
. If I happen to be taking my science class and I can't get into the classroom and we're Dissecting a frog. We'll probably dissect the frog in something like
Roblox
PERSON
and a simulation. Which I think's gonna be very very powerful. And for our company where there's a lot of people that are gonna end up working all around the world. Some of us will be in the office Having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipitous thing where we both happen to go over and chat. I think also is gonna Very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Access the financial world on demand Hear from leading economists Policy makers And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
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Often
PERSON
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make up
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of the immigrants receiving coveted Hone B visas for the
US
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and it's Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built. A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in the space that I think is ultimately got so many years of growth to it and is a new category following other types of technologies. There's still so much innovation.
Yeah, wow. I had a friends to account. I'm dating myself a little bit. But I had a friend to account. I'm curious what you learn from
the early days
DATE
of social media. Yes, so one thing I learned is it was really fun to invest but it's not my sweet spot. Like my sweet spot is trying to build and create things. I remembered, I think having
Number 79
CARDINAL
on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interactive physics where we were simulating the world and then friends their seeing how important Those are a couple of the components that have come together in roadblocks. So, when you start a Roblox in
2004
DATE
, what was the idea back then? The feeling of this new category for me started feeling almost inexerable. It's a category that people We've seen a lot of movies. We were thinking yes immersive 3d co experience. Kids flocked to roadblocks during the pandemic. In the middle of the pandemic
2021
CARDINAL
45 1 billion dollars
MONEY
market cap we spoke on that day even you have said that kind of growth won't keep up what kind of growth can we expect from roblox in normal times we believe Be a part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people. So they're gonna go to school in
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Classroom
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and were dissecting a frog. We'll probably dissect the frog in something like
Roblox
PERSON
and a simulation which I think is gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the Some of us will be in the office some won't having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipitous thing where we both happen to go over and chat. I think also is Be very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Access the financial world on demand Here from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
. Alphabets sun dart patch eye
Microsoft
ORG
such a
Nadella IBM's
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PERSON
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running companies all over the world. Why have so many
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universities and later at the business world. Meanwhile the belief in
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Indians
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make up
Visas
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. And it's a Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in the space that I think is ultimately got so many years of growth to it and it's a new category following other types of technologies. There's still Innovation to be done and there's so much invention to be done in this category that it's mind boggled.
Powerful and for our company where there's a lot of people that are gonna end up working all around the world, some of us will be in the office, some won't. Having a common threeD place where we can have those water cooler conversations where everyone has a desk but we Where we both happen to go over and chat. I think also is gonna be very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun dart
PERSON
patchai
Microsoft
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Sanjay Mayhotra
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Gap VM
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running companies all over the world. Why have so many
Indians
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risen to the top? Competitive education system. If you can survive the pressure it takes to get into one of the
Indian
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American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
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make up
Visa
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for the
US
GPE
. And it's a Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built. A better verse what do you think I think we've started and it goes back to how exciting it is to to have a company in this space that I think is ultimately got so many years of growth to it and it's a new category following other types of technologies. There's still so much innovation And there's so much invention to be done in this category that it's mind boggling. That metaverse the term is just How do you respond to that? This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zucker Announced
PERSON
his plan to Change Facebook's name to
Meta
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as if it was something new. Did that kinda bother you? No, of course not. It's Hard to predict in
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one
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of our strengths. We think that's like a huge starting point for us, but we're early in our quest for innovation here. Roblox has built a huge business selling Does this evolve into a much bigger marketplace? Revelation that people would ultimately make a living on platforms like this that started this digital currency is very Roblox centric and that we're a systems company or a utility so it has form this robust economy it's allowed us to keep robot you know
Roblox
PERSON
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50 1000
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people in real time on a phone, going to a concert together and waving at your friends. I think that's gonna Lot of engineering work that each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
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CARDINAL
place to another. I think the
Indians
NORP
make up
Three fourths
QUANTITY
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US
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Metaverse
PERSON
the term is just How do you respond to that? This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zuckerberg
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what are the companies that really figure it out and there's so many elements of innovation that are needed having a
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of our strengths we think that's like a huge starting point for us but we're early in our quest for innovation here Roblox has Huge business selling Does this evolve into a much bigger marketplace? That people would ultimately make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or a utility so it has form this robust economy it's allowed us to keep robot you know
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one
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place to another I think they'll be lightweight way Starting to think about that. So, what role do you think
Apple
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Android
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the third week
DATE
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Eric
PERSON
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thousands
CARDINAL
of moderators every image that goes Platform gets human reviewed. We filter texts very stringently especially for
13
DATE
and under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us How after mistake are you about AI and tech being able to do that? I'm really actually optimistic. We would never compare to the real world because our standards are so much more stringent. But I do believe this will just keep getting better and better and I think over time it'll be
Following other types of technologies. There's still so much innovation to be done. And there's so much invention to be done in this category. That's mind boggling. The critics think that metaverse the term is just marketing. Respond to that. This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zuckerberg
PERSON
To his plan to
Matters
ORG
and change Facebook's name to
Meta
ORG
as if it was something new. Did that kinda bother you? No, of course not. It's Hard to predict in
five to 10 or 20 years
CARDINAL
. Where did the companies that really figure it out? And there's so many elements of innovation that are needed. Having a
UGC
ORG
community,
one
CARDINAL
of our strengths. We think that's like a huge starting point for us, but we're early in our quest for innovation here. Roblox has Huge business selling Does this evolve into a much bigger marketplace? Make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or a utility so it has form this robust economy it's allowed us to keep robot you know roblox is free for the Majority. Would Roblox have a partner with some of these other companies working on the Metaverse whether it is
Meta
ORG
or unity or epic or
Microsoft
ORG
? The core technology of, you know, how are we gonna ultimately support
50 1000
CARDINAL
people in real time on a phone, going to a concert together and waving at your friends? I think that's Each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
one
CARDINAL
place to another. I think they'll be lightweight ways of starting to think about that. So, what role do you think
Apple
ORG
and
Android
ORG
should play in the metaphors? And and would there polic To change to really support this vision. The biggest thing we would take advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and
Apple
ORG
kind of run their businesses but when we think about more and more developers making a living on Like us and having to build stuff if those sorphies were to change we would move most of that money back to our developers your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job? In
the third week
DATE
, when we were live, you can go imagine
Eric
PERSON
and myself back in our small office.
Eric
PERSON
and I said, oh my gosh, safety and civilities. It's we're gonna have to do. We had maybe
100
CARDINAL
people at the time chatting on roadblock We saw a few not that egregious but early signs and we just made the call this is gonna be the foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes Platform gets human reviewed. We filter texts very stringently especially for
13
DATE
and under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us How often are you about AI and tech being able to do that? I'm really actually optimistic. We would never compare to the real world because our standards are so much more stringent. But I do believe this will just keep getting better and better and I think over time it'll get to the point where if a
6 year old
DATE
is Platform it's literally as if the parents wanted to be there with them watching everything we'll be able to offer that type of thing no a lot of parents are terrified they're terrified of a future metaverse they don't understand the parental controls do you understand that feeling we do we actually have I think it creates a higher standard for us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, the stories about Roblox being a playground for virtual fascists.
That I think is the ultimately got so many years of growth to it and it's a new category following other types of technologies. There's still so much innovation to be done and there's so much invention to be done in this category. That's mind boggling. Just marketing. How do you respond to that? This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zuckerberg
PERSON
announced his plan to Own the meta verse and change Facebook's name to
Meta
ORG
as if it was something new. Did that kinda bother you? No, of course not. It's Hard to predict in
five to 10 or 20 years
CARDINAL
. What are the companies that really figure it out and there's so many elements of innovation that are needed. Having a
UGC
ORG
community,
one
CARDINAL
of our strengths. We think that's like a huge starting point for us, but we're early in our quest for innovation here. Roblox has Huge business selling Does this evolve into a much bigger marketplace? Revelation that people would ultimately make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or a utility so it has formed this robust economy it's allowed us to keep robot you know
Roblox
PERSON
is free for the vast majority what Roblox ever partner with some of these other
Nobody
PERSON
's working on the metaverse whether it is meta or unity or epic or
Microsoft
ORG
.
Core
ORG
technology of, you know, how are we gonna ultimately support
50 1000
CARDINAL
people in real time on a phone, going to a concert together and waving at your friends. I think that's gonna be a lot of engineering work that each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from one To another. I think they'll be lightweight ways of starting to think about that. So, what role do you think
Apple
ORG
and
Android
ORG
should play in the metaphors? And and would there policies need to change to really support this vision? The biggest thing we would Take advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and apple kind of run their businesses but when we think about more and more developers making a living on platforms like us and having to build stuff, if those store fees were to change, we would move most of that money back Developers. Your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job In
the third week
DATE
, when we were live, you can go imagine
Eric
PERSON
and myself back in our small office.
Eric
PERSON
and I said, oh my gosh, safety and civilities. It's we're gonna have to do it. We had maybe
100
CARDINAL
people at the time chatting on roadblocks. We saw a few not that egregious but early signs and we just made the call. This is gonna be The foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes on our platform gets human reviewed we filter texts very stringently For
13
DATE
and under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us. After mistake are you about AI and tech being able to do that I'm really actually optimistic we would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think overtime it'll get to the point where if a
6 year old
DATE
is on our platform it's As if the parents wanted to be there with them watching everything we'll be able to offer that type of thing no a lot of parents are terrified they're terrified of a future metaphors they don't understand the parental controls do you understand that feeling we do we actually have to I think it creates a higher For us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, the story.
That each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
one
CARDINAL
place to another. I think they'll be lightweight ways of starting to think about that. So, what role do you think
Apple
ORG
and
Android
ORG
should play in the Metaverse? And and
Policies
ORG
need to change to really support this vision. The biggest thing we would take advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and apple kind of run their businesses but when we think about more and more developers making a living on Like us and having to build stuff if those store fees were to change we would move most of that money back to our developers your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job In
the third week
DATE
, when we were live, you can go imagine
Eric
PERSON
and myself back in our small office.
Eric
PERSON
and I said, oh my gosh, safety and civilities. It's we're gonna have to do. We had maybe
100
CARDINAL
people at the time chatting on roblox. We saw a few not that egregious but early signs and we just made the call. This is gonna be The foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes on our platform gets human reviewed we filter texts very stringently especially 13 and under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us. After mistake are you about AI and tech being able to do that I'm really actually optimistic we would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think over time it'll get to the point where if a
6 year old
DATE
is on our platform it's As if the parents wanted to be there with them watching everything we'll be able to offer that type of thing. No a lot of parents are terrified. They're terrified of a future. They don't understand the parental controls. Do you understand that feeling? We do. We actually have to I think it creates a higher For us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, About Roblox being a playground for virtual fascists. What? Sex tape of her. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the rough are platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. Alphabet in
Google
ORG
. This question about kids and tech habits and screen time and he said it's something that even stresses him out. You know, this is the guy who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? I think it highlights how much it's a responsibility of both Platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together we're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either We're involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? People ask me all the time what is the key to being a really good investor my
We would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think over time it'll get to the point where if a
6 year old
DATE
is on our Form. It's literally as if the parents wanted to be there with them watching everything. We'll be able to offer that type of thing. Now, a lot of parents are terrified. They're terrified of a future metaverse. They don't understand the parental controls. Do you understand that feeling? We do. We actually have to It creates a higher standard for us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, About roblox being a playground for virtual fascists. What? Sex tape of her. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the off our platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. Alphabet and Google this question about kids and tech habits and screen time and he said it's something that even stresses him out. You know, this is the guy who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? I think it highlights how much it's a responsibility of both Platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together we're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either We're involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. I'm
David Weston
PERSON
.
Renewables
PERSON
. This is a level of uncertainty that we haven't had to deal with. You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars Like a science fiction writer and talk about it and I what I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
Meta
ORG
horizon worlds is does that You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the old
For us because i think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, The stories about Roblox being a playground for virtual fascist. Well there was just a story about
Kim Kardashian's
PERSON
own child Sex tape of her. Happened there? That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the off our platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. The CEO of Alphabet and Google this question about kids and tech habits and screen time and he said it's something that even stresses him out. You know, this is the guy who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? I think it highlights how much it's a responsibility of both Platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together we're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either Were involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet Revolution. Kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. I'm
David Weston
PERSON
. We think that's the next secular shift. Yes, it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars Like a science fiction writer and talk about it and I what I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
Met
PRODUCT
a horizon worlds is does that You know, more experiences like that for adults. We sometimes think of robots ultimately as fading into the background as a utility like the electric grid. Even those photo realistic and there's all these awesome avatars and connection and Identity around the world. The things we start seeing built on this are wide range of things. So you imagine this not just for kids but for everyone Question. Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? Developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one of the creators on roadblocks is coming up with avatars and stories and ideas and characters like that. We want them to be in the limelight.
Rob
PERSON
share.
Over their kids. There have been some serious content challenges, you know, Stories about Roblox being a playground for virtual fascists. What? Sex tape of her. Happened there. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in their off our platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention but very unfortunate and Well, you know, our vision is to be the most civil place for everyone. Hi the CEO of
Alphabet
GPE
and Google this question about kids and tech habits and screen time and he said it's something that even stresses him out you know this is the guy who runs one of the most powerful technology companies in the world I have
four
CARDINAL
kids you have
four
CARDINAL
kids did it stress you out like how did you deal with your kids How much it's a responsibility of both platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together. We're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself. So, we do like the fact that most of this is either Were involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? People ask me all the time what is the key to being a really good investor? I tell them it's to surround yourself with and work with the best and best as you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest investors in the world. That I would like to have managing my money. Revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. I'm
David Weston
PERSON
. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars Like a science fiction writer and talk about it and I what I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
Meta
ORG
horizon worlds is does that You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the electric grid. Even though it's photo realistic, and there's all these awesome avatars and connection, and ident Around the world. The things we start seeing built on this are wide range of things. So you imagine this not just for kids but for everyone. Adults too. Okay. Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one Creators on Roblox who's coming up with avatars and stories and ideas and characters like that we want them to be in the limelight. Roblox chairs took a dive on the back of
Netflix
GPE
results which Obviously.
People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest invest In the world. The people that I would like to have managing my money. At the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. I'm
David Weston
PERSON
. Yes it's about renewables This is a level of uncertainty that we haven't had to deal with. Television and radio You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars Like a science fiction writer and talk about it and I what I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
Meta
ORG
horizon worlds is does that You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the electric grid. Even though it's photo realistic, and there's all these awesome avatars and connection, and identity The world. The things we start seeing built on this are wide range of things. So, you imagine this not just for kids but for everyone. Adults too. Okay. Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one of the creators on
Roblox
PERSON
who's coming up with avatars and stories and ideas and characters like that. We want them to be in the limelight. Roblox Took a dive on the back of
Netflix
GPE
results which obviously plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being in a market like this, you know, where we think ultimately,
Bill People
PERSON
are gonna use this type of technology and the other exciting thing about this market So many big inventions that still have to happen. It feels like we're pretty mature but inside our company, we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step. Would roadblocks ever consider more in game advertising? Yeah, there's a funny trivia note I would share to all the
Roblox
PERSON
fans out there. There was The very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on roadblocks that's all gone now it's gone for a couple of reasons we didn't want it to interfere with the user experience and also our our virtual economy has become such a powerful way to power this that we are able to Down. In the future though, I think there's a certain type of advertising that is kids safe, that is immersive that doesn't get in your way. Take away from the ethos of what makes roblox green yeah I think our the people on Roblox you know there there to authentically connect with their friends and as long as what we're doing with these brands is very clear and non deceptive appropriate for those ages I think they'll they'll figure The balance of how much time do we go into a store versus how much time do we go to a crazy adventure tycoon and you know build an amusement park together. So either way this could be a huge new revenue stream for you. I believe it's
Does that You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the electric grid. Even those photo realistic and there's all these awesome avatars and connection and Danity around the world. The things we start seeing built on this are wide range of things. So, you imagine this not just for kids but for everyone. Adults too Okay. Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one of the creators on
Roblox
PERSON
who's coming up with avatars and stories and ideas and characters like that. We want them to be in the limelight.
Rob Took
PERSON
a dive on the back of
Netflix
GPE
results which Plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being at a market like this, you know, where we think ultimately, Billions of people are gonna use this Technology and the other exciting thing about this market Many big inventions that still have to happen. It feels like we're pretty mature but inside our company, we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step. Consider more in game advertising? Yeah, there's a funny trivia. Note I would share to all the
Roblox
PERSON
fans out there. There was a time, the very
first
ORDINAL
way we monetize was advertising, and then there was also a time when we had pre-roll video on
Roblox
PERSON
. That's all gone now. It's gone Couple of reasons. We didn't want it to interfere with the user experience. And also our our virtual economy has become such a powerful way to power this that we are able to take that down. In the future though I think there's a certain type of advert That is kids safe that is immersive that doesn't get in your way. And how do you make sure that doesn't take away from the ethos of what makes
Roblox
PERSON
great? Yeah, I think our the people on
Roblox
PERSON
, you know, they're there to authentically connect with their friends As long as what we're doing with these brands is very clear non-deceptive appropriate for
those ages
DATE
. I think they'll they'll figure out the balance of how much time do we go into a store versus how much time do we go to a crazy adventure tycoon and you know, build an amusement park together. So, either way, this could Huge new revenue stream for you. I believe it's an awesomely huge revenue stream and at the same time, we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face. Please out which we hope it does and we have people of all ages on the platform and we're around the world I think this maintaining that civility as we grow as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way that's a big challenge it takes a lot of thought I think thinking through the I I really like we're very technology driven company so it's fun to be running a company where we have to do these
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges Are interesting. We do a little rapid fire section just to get this. Okay.
Awesome
ORG
.
First
ORDINAL
question what's your morning routine Wake up. Go outside on my porch do a CrossFit workout Go to work. Where are you most productive? Home or office? Both. Different types of productivity, home zen state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. Think it all gets down to the joy of health really. Like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Hawk radio show. Yeah. Now that I've met you in person, I I get this. No way. Can you be sure to listen to yeah what was What's your Starting in college.
Ideas and characters like that we want them to be in the limelight robot shares took a dive on the back of
Netflix
GPE
results which obviously plummeted our investors reading too much into the connection there I think our company is somewhat And what is very exciting to go to work and be the CEO is being at a market like this you know where we think ultimately Billions of people are gonna use this Hey we've technology and the other exciting thing about this market there's so many big inventions that still have to happen it feels like we're pretty mature but inside our company we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step would Locks ever consider more in game advertising? Yeah, there's a funny trivia note I would share to all the
Roblox
PERSON
fans out there. There was a time. The very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on
Roblox
PERSON
. That's all gone now. It's gone Couple of reasons. We didn't want it to interfere with the user experience and also our our virtual economy has become such a powerful way to power this that we are able to take that down. In the future though, I think there's a certain type of Housing that is kids safe that is immersive that doesn't get in your way. Yeah, I think our the people on
Roblox
PERSON
, you know, there, there to authentically connect with their friends As long as what we're doing with these brands is very clear and non deceptive, appropriate for
those ages
DATE
. I think they'll they'll figure out the balance of how much time do we go into a store versus how much time do we go to a crazy adventure tycoon and you know, build an amusement park together. So, either way, this could be a huge new revenue I believe it's an awesomely huge revenue stream and at the same time, we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face. Plays out which we hope it does and we have people of all ages on the platform and we're around the world. I think it's maintaining that civility as we grow, as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way. That's a big challenge. It takes a lot of thought. I think thinking through the I I really like we're very technology driven company so it's fun to be running a company where we have to do these
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges
Super
ORG
interesting. We do a little rapid fire section just to get this. Okay, I'll give it a try.
Awesome
ORG
. This is like
First
ORDINAL
question what's your morning routine Wake up. Outside of my porch do a CrossFit workout Take a shower go to work. Where are you most productive? Home or office? Both. Different types of productivity, home, zen state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show right What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. I think it all gets down to The joy of health really like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Talk radio show. Yeah. Now that I've met you in person, I I get this. No way. Your favorite fun to listen to yeah what was Hey so my
GM
ORG
was I would say starting in college when I would have insomnia at
2 AM
TIME
I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
Italian
NORP
Ferro
ORG
all that just And to the people calling in so I after acknowledge revolution was acquired and had a year I had a little time to dabble my jam was really trying to talk about outrageous topics you know Gambling, other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. Yeah. You know, it's like call your mom. Please call. So, it's really scary if you're a No one's calling inside I I made it really controversial.
Or authentic if one of the creators on
Roblox
PERSON
is coming up with avatars and stories and ideas and characters like that we want them to be in the limelight
Roblox
PERSON
chairs took a dive on the back of
Netflix
GPE
results which Obviously plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being in a market like this, you know, where we think ultimately,
Billy
PERSON
and people are gonna use this Type of technology and the other exciting thing about this market Many big inventions that still have to happen. It feels like we're pretty mature but inside our company, we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step. Would roadblocks ever consider more in game advertising? Yeah, there's a funny trivia note I would share to all the
Roblox
PERSON
fans out there. There was a The very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on roadblocks. That's all gone now. It's gone for a couple of reasons. We didn't want it to interfere with the user experience. And also our our virtual economy has become such a powerful way to power this that we are able to That down. In the future though, I think there's a certain type of advertising that is kids safe. That is immersive that doesn't get in your way. And how do you make sure that doesn't take away from the ethos of what makes
Roblox
PERSON
great? Yeah, I think our the On Roblox, you know, they're there to authentically connect with their friends and as long as what we're doing with these brands is very clear and on deceptive, appropriate for
those ages
DATE
. I think they'll they'll figure out the balance of how much Do we go into a store versus how much time do we go to a crazy adventure tycoon and you know build an amusement park together. So either way this could be a huge new revenue stream for you. I believe it's Awesomely huge revenue stream and at the same time, we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face? Please out which we hope it does and we have people of all ages on the platform and we're around the world I think Any that civility as we grow as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way that's a big challenge. It takes a lot of thought. I think thinking through the technology I I really like we're very technology driven company so it's fun to be running a company where We have to do these
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges super interesting. We do a little rapid fire section just to get this. Okay. Are you guys better
Awesome
ORG
.
First
ORDINAL
question what's your morning routine Wake up. Go outside on my porch do a
CrossFit
ORG
workout
Shower
ORG
, go to work. Where are you most productive home or office? Both. Different types of productivity, home zen state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show right What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. I think it all gets down to the joy of health really like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Hawk radio show. Yeah. Now that I've met you in person, I I get this. No way. Can you To yeah what was your style like what was your I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
retalia all that just listen to the people calling in So I after acknowledge revolution was acquired and had a year I had a little time to dabble my jam was really trying to talk about outrageous topics you know Humbling other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. Yeah. You know, it's like call your mom. Please. So, it's really.
Versus how much time do we go to a crazy adventure tycoon and you know building amusement park together so either way this could be a huge new revenue stream for you I believe it's an awesome Huge revenue stream and at the same time, we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face. Please out which we hope it does and we have people of all ages on the platform and we're around the world I think maintaining that civility as we grow as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way that's a big challenge it takes a lot of thought I think thinking through the I I really like we're very technology driven company so it's fun to be running a company where we have to do the
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges Are interesting. We do a little rapid fire section just to get this. Okay.
Awesome
ORG
.
First
ORDINAL
question what's your
morning
TIME
routine? Wake up. Go outside on my porch do a crossfit workout Go to work. Where are you most productive home or office? Both. Different types of productivity, home zen state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show right What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. Think it all gets down to the joy of health really. Like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that. Everything else just completely falls. Hawk radio show. Yeah. Now that I've met you in person, I I get this. No way. Can you be sure to listen to? What's your Iheartradio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
retaliate just listen to the people calling in So I after acknowledge revolution was acquired and had
a year
DATE
. I had a little time to dabble. My jam was really trying to talk about outrageous topics. You know, Humbling other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. You know, it's like call your mom. It's really scary if you're a DJ and no one's calling inside. I I made it really controversial. I have people come on and debate interesting topics. If you could have dinner with
Steve Jobs
PERSON
or Walt Disney. Who would you pick? Both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some of the innovation but I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
? Life is short It's such a valuable commodity. What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance. I would say can I Make my roadblocks job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job is a CEO? Every CEO job is different. Like I like doing it. So can I figure out what my role is? You mentioned your co-found
Eric Castle
PERSON
. Yeah. Earlier who died Of cancer. Yeah.
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks? That roadblocks has become. Wow I think he'd be It's a good question. Yeah. Like, I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very funny. He's just such a brilliant partner. Yeah And he he also set the standard for taking the long view
Hey I get this no way. You're pretty fun to listen to. Style like what was your
GM
ORG
was I would say starting in college when I would have insomnia at
2 AM
TIME
I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
all that just listen to the people calling in So I after acknowledge revolution was acquired and had
a year
DATE
. I had a little time to dabble. My jam was really trying to talk about outrageous topics. You know,
Bling
GPE
, other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. You know, it's like call your mom. It's really scary if you're a DJ and no one's calling inside. I I made it really controversial. I have people come on and debate interesting If you could have dinner with
Steve Jobs
PERSON
or Walt Disney Who would you pick? Both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some of the innovation but I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
? Life is short. It's such a valuable commodity. What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance. I would say can I Make my roadblocks job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job is to CEO? Every CEO job is different. Like I like doing it. So, can I figure out what my role is? You mentioned your co-founder,
Eric Castle
PERSON
. Yeah. Earlier who Tragically of cancer. Yeah.
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks? That roadblocks has become. Wow I think he'd be It's a good question. Yeah. Like I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very He's just such a brilliant partner. Yeah. And he he also set the standard for taking the long view on how we engineer things. A lot of the
Robots
NORP
are still You know, his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So, in
5 years
DATE
, will the metaverse exist? In in the form that you imagine or is it take us is it gonna Much longer like what's the time horizon? Well, it's really interesting, right? Cuz we're right in the middle of it right now. In a sense with
50 1 million
CARDINAL
people every day on our platform. Yeah. It's already here. And at the same time Ultimately gonna be possible could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all the anniversary really has existence since Online dial up muds. Really? TwoD. Very simple. Text. You can call that the
Mediverse
PERSON
. It's existed in multiplayer gaming.
World of Warcraft
ORG
, Exist now with more people and in
10 or 20 years
DATE
it'll exist photo realistically with
50 1000
CARDINAL
people Have so much passion Job. Roblox your final stop on your journey. Finals but I think there's a lot of time ahead of me here.
Dave Bazooki
PERSON
over a blocks. Thank you so much.
Controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. Yeah. You know, it's like I call your mom. It's really scary if you're a DJ and no one's calling inside I I made it really controversial I have people come on and debate interesting If you could have dinner with
Steve Jobs
PERSON
or Walt Disney Would you pick? You can't pick both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some of But I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
. Life is short It's such a valuable commodity. What you do, your friends, your time, your family is so important. So how do you define work life integration? I don't like the word balance. I would say can I Make my roadblocks job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job is a CEO? Every CEO job is different. Like I like doing it. So, can I figure out what my role is? You mentioned your co-found
Eric Castle
PERSON
. Yeah. Earlier who died Of cancer. Yeah.
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks? That roadblocks has become. Wow I think he'd be It's a good question. Yeah. Like I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very excited. Here's just such a brilliant partner. Yeah And he he also set the standard for taking the long view on how we engineer things a lot of the technology at roadblocks is still You know his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So in
5 years
DATE
will the metaverse exist? In the form that you imagine or is it take does is it Much longer like what's the time horizon? Well, it's really interesting, right? Cuz we're right in the middle of it right now. In a sense with
50 1 million
CARDINAL
people every day on our platform. Yeah. It's already here. And at the same time, Ultimately gonna be possible, could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all that the really has existence since Online dial up muds really twoD very simple text you can call that the
Mediverse
PERSON
it's existed in multiplayer gaming world of
Warcraft
ORG
exist the exist now with more people and in
10 or 20 years
DATE
Exist photo realistically with
50 1000
CARDINAL
people. We have so much passion for this job Blocks your final stop on your journey. What's definitely my final stuff but I think there's a lot of time ahead of me here.
Dave Bazooki
PERSON
, over a blocks, thank you so much.
Bird to get people to call in. So it's really scary if you're a DJ and no one's calling inside. I I made it really controversial. I have people come on and debate interesting topics. If you could have dinner with
Steve Jobs
PERSON
or Walt Disney. Who would you pick? You can't pick both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some of
Motivation
ORG
. But I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
. Life is short. Valuable commodity What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance. I would say can I Make my roblox job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job as a CEO? Every CEO job is different. Like, I like doing it. So, can I figure out what my role is? You mentioned your co-fo
Eric Castle
PERSON
. Yeah. Earlier who died Of cancer. Yeah. In
2013
DATE
.
Today
DATE
what do you think he would think of the roadblocks that Roblox has become? Wow I think he'd be proud It's a good question. Yeah. Like I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very He's just such a brilliant partner. Yeah. And he he also set the standard for taking the long view on how we engineer things. A lot of the Roadblocks is still My you know his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So in
5 years
DATE
will the metaverse exist? In in the form that you imagine or is it take does is Take much longer like what's the time horizon? Well, it's really interesting, right? Cuz we're right in the middle of it right now. In a sense with
50 1 million
CARDINAL
people every day on our platform. Yes. It's already here. And at the same time Is ultimately gonna be possible could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all the anniversary really has existence since Online dial up muds really too deep very simple text you could call that the verse it existed in multiplayer gaming world of war craft exist it exist now with more people and in
10 or 20 years
DATE
it Exist photo realistically with
50 1000
CARDINAL
people. Have so much passion for this job Roblox your final stop on your journey. Well, definitely my final stuff but I think there's a lot of time ahead of me here.
Dave Bazuki
PERSON
overall blocks. Thank you so much.
So yeah I think he'd be very excited. Seems like you you miss him. Just such a brilliant partner Any he also set the standard for taking the long view on how we engineer things a lot of the
Robots
ORG
is still You know, his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So, in
5 years
DATE
, will the metaverse exist? In in the form that you imagine or is it take us is it gonna Much longer like what's the time horizon? Well, it's really interesting, right? Cuz we're right in the middle of it right now. In a sense with
50 1 million
CARDINAL
people every day on our platform. Yeah. It's already here. And at the same time, Is ultimately gonna be possible, could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all the mediverse really has existence since
Online
PRODUCT
, dial up muds really twoD, very simple, text. You can call that the
Mediverse
PERSON
. It's existed in multiplayer gaming, world of warcraft, Exist now with more people and in
10 or 20 years
DATE
it'll exist photo realistically with
50 1000
CARDINAL
people you clearly have so much passion for this job Roblox your final stop on your journey. But I think there's a lot of time ahead of me here.
Dave Bazooki
PERSON
over a blocks thank you so much. Mobility. So, we have flick to switch there and really we're going to step by step electrify everything. And what does that mean? When you think of cutting-edge technology at sea you might be thinking of stuff like this But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. Katrina shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. Of all the worlds is huge
Three%
GPE
mean that sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths.
Mobility. So, we have flick to switch there and really we're going to step by step electrify everything. And what does that mean? When you think of cutting-edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. Katrina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. About three% of all the worlds is huge to From shipping. Sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? There's an old saying in finance that cash is king but when it comes to payments the data suggests that it's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in-person transactions around the world Can't even send it straight from the beginning cuz his really focused on People to use electronic forms of of pain. In fact, if you look at like the
US
GPE
for example, you basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic. Just about
every single year
DATE
. Text
China
GPE
today
DATE
at
20 1 trillion dollars
MONEY
. And there's another
14 1 trillion dollars
MONEY
worth of cash and check left. So yes we are moving towards the society. A new technology is promised to kick these trends into a higher gear. The terminal on the till of the merchant. Depending on how old one is. One is used to that. At least then and the developed world. But in that is not everywhere but Has a phone so electronic payments can end up in a super simple way that everybody's hands and for our business that's a massive growth of opportunity
MasterCard
ORG
is already seizing that opportunity after In
2020
DATE
revenues shot past pre-pandemic levels in
2021
DATE
driven by a rebound consumer spending. Ways to keep the momentum going.
Mobility so we have flick to switch there and really we're going to step by step electrify everything And what does that mean
Combustion
PRODUCT
and you'll get electrified. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Katina
GPE
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods are transported sea at some point but there's a significant unseen cost to the modern era of global commerce. Output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? Old saying in finance that cash is king but when it comes to payments the data suggests that's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in person transactions around the world. Came and send it straight from the beginning cuz his really focused on People to use electronic forms of of pain. In fact, if you look at like the
US
GPE
for example, Basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic just about
every single year
DATE
. Volume text
China
GPE
today
DATE
at
20 1 trillion dollars
MONEY
. And there's another
14 1 trillion dollars
MONEY
worth of cash and check left to digitize So, yes, we are moving towards a cash flow society. Technology is promised to kick these trends into a higher gear. The terminal on the till of the merchant. Depending on how old one is. One is used to that. At least then and the developed world. That is not everywhere but every one has a phone. So, electronic payments can end up in a super simple way that everybody's hands and for our business, that's a massive growth of opportunity.
MasterCard
ORG
is already seizing that opportunity Driven by a rebound consumer spending. See if
Osach
GPE
and
Mehra
PERSON
knows this boom is like your fade. And he's set on finding ways to keep the momentum going. Being successful in this kind of environment is to have a diversified portfolio. You gotta be enabled from an expensive standpoint. You gotta be very disciplined. As a financial officer, what I've gotta do is I've gotta make sure that we are investing in those resources Which are currently in demand from a customer standpoint but at the same time not losing sign of the long term. CEO
Michael Mebach
PERSON
counts on
Mayrodge
ORG
do more than just oversee the ballot sheet. The top line for me is
Visor
PERSON
and confident. Conciliary yes he's quite happy pushing back and saying by his
Mobility. So, we have flick to switch there and really we're going to step by step. Electrify everything. And what does that mean? When you think of cutting edge technology at sea You might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. From Tina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. From shipping. Certainly not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? There's an old saying in finance that cash is king but when it comes to payments the data suggests that's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in-person transactions around the Hey focused on People to use electronic forms of of pain. In fact, if you look at like the
US
GPE
for example, you basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic. Just about
every single year
DATE
. Volume text
China
GPE
today
DATE
at
20 1 trillion dollars
MONEY
. And there's another
14 1 trillion dollars
MONEY
worth of cash and check left to digitize Hey Facebook society. Technology is promised to kick these trends into a higher gear. The terminal on the till of the merchant. How depending on how old one is, one is used to that. At least then and the developed world. But it, that is not everywhere, but every one has a phone. So, electronic payments can end up in a super simple way that everybody's hands And for our business that's a massive growth of opportunity
MasterCard
ORG
is already seizing that opportunity after In
2020
DATE
revenues shot past pre-pandemic levels in
2021
DATE
driven by a rebound consumer spending. See if
Osach
GPE
and
Mehra
PERSON
knows this boom is like it fade. And he's set on finding ways to keep the momentum going. Portfolio. Standpoint. As a finance officer, what I've gotta do is I've gotta make sure that we are investing in those resources which are currently in demand from a customer standpoint. But at the same time not losing sign of the long term. CEO
Michael Mebach
PERSON
counts on
Mayrodge
ORG
due more than just oversee the ballot sheet. The top line for me is
Visor
PERSON
and confident
Conciliary
DATE
. Over this
Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? There's an old saying in finance that cash is king but when it comes to payments the data suggests that's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in-person transactions around the world Payment send it straight from the beginning his his really focused on getting Want to use electronic forms of of pain. In fact, if you look at like the
US
GPE
for example, Basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic just about
every single year
DATE
. Volume text
China
GPE
today
DATE
at
20 1 trillion dollars
MONEY
. And there's another
14 1 trillion dollars
MONEY
worth of cash and check left to digitize So yes we are moving towards a cash flow society. Technology is promised to kick these trends into a higher gear. The terminal of the merchant. Depending on how old one is. One is used to that. At least then and the developed world. That is not everywhere but every one has a phone Payments can end up in a super simple way that everybody's hands and for our business that's a massive growth of opportunity
MasterCard
ORG
is already seizing that opportunity after In
2020
DATE
revenues shot past pre-pandemic levels in
2021
DATE
driven by a rebound consumer spending. See if
Osach
GPE
and
Mehra
PERSON
knows this boom is like your fade. And he's set on finding ways to keep the momentum going. Being successful in this kind of environment is to have a diversified portfolio. You gotta be nimble from an expense standpoint. You gotta be very disciplined. As a financial officer, what I've gotta do is I've gotta make sure that we are investing in those resources which are currently in demand from a customer standpoint. But at the same time, not losing sign CEO
Michael Mebach
PERSON
counts on MayRuch do more than just oversee the ballot sheet. The top line for me is
Visor
PERSON
and confident. Conciliary yes he's quite happy pushing back and saying by You know in the past it was more of a function of you know let's make sure the numbers are good let's make sure we get a great control environment let's make sure we're actually able to close the books on time let's make sure we've got all the financial elements of the business in order the job Making sure we are creating the right linkage What the purpose of the business is what the strategy of the business is Delivering on the financial returns for the company all while driving long term shareholder value. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplishment of the strategy of the company
Mastercard
ORG
's core business is no surprise cards. Carded products currently account for
over half
CARDINAL
the company's revenue. The company said ambitious growth targets it as
2021
DATE
investor day. Committing to expand this core and to diversify beyond it. We've been on a
6 year
DATE
strategy to be a multi-rail company in plain
English
LANGUAGE
that means whichever way you pay people enable that despite the fact that card is an hour name is essentially any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta recognize Not only where the consumers today but where they're gonna go because a lot of what we've got to do takes time to implement And is it difficult? You'll get some, you'll get it right sometimes, you'll get it wrong sometime, but hopefully you're getting it right more often than you're getting it wrong. Yeah. And you're working with through that. Forecast.
And he said on finding ways to keep the momentum going. Being successful in this kind of environment is to have a diversified portfolio. You gotta be enabled from an expensive standpoint. You gotta be very disciplined. As a financial officer, what I've gotta do is I've gotta make sure that we are investing in those resources Which are currently in demand from a customer standpoint but at the same time not losing sign of the long term. CEO
Michael Mebach
PERSON
counts on
Mayrodge
ORG
do more than just oversee the ballot sheet. The top line for me is
Visor
PERSON
and confident. Conciliary. The rule of the chief financial officer is actually changed value dramatically over
this 20 plus year
DATE
10 year
DATE
that I've had. You know in the past it was more of a function of you know let's make sure the numbers are good. Let's make sure we get a great control environment. Let's make sure we're actually able to close the books on time. Let's make We've got all the financial elements of the business in order. The job of the
CFO
ORG
in in our view in my view is a function of making sure we're creating the right linkage. What the purpose of the businesses, what the strategy of the business is, Delivering on the financial returns for the company all while driving long term shareholder family. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplishment of the strategy of the company
MasterCard
ORG
's core business is no surprise cards. Carded products currently account for
over half
CARDINAL
the company's revenue. The company said ambitious growth targets it is
2021
DATE
investor day. Committing to expand this core and to diversify beyond it. We've been on a
6 year
DATE
strategy to be a multi-rail company in plain
English
LANGUAGE
that means whichever way you pay people enable that despite the fact that card is an hour name is essentially any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta recognize Not only weather consumers today but where they're gonna go because a lot of what we've gotta do takes time to implement. And it's a difficult you'll get some you'll get it right sometimes you'll get it wrong sometime but hopefully you're getting it right more often than you can get wrong and you're working with through that. Forecasting preferences is complicated by an uncertain economy consumer confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis for
Mastercard
ORG
and its peers. To what people often perceive I think famous as an industry it will be quite resilient in it downtown Generally speaking Even during a recession the amount that consumers spend actually does not go down it continues to grow I need to think that people are worried about more in the payments industry is kind of how does the mix of spending change? The
first
ORDINAL
thing is that typically happens if you're going into a session Back on discretionary categories of spend they move into The non discretionary gateways are spent Pivot into food, they pivot into rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which run debit and credit are exactly the same. The technology is the same. The distribution models the same. So those those areas don't necessarily change by virtue of moving into more for debit or credit.
One
CARDINAL
area that master card has been moving vigorously into is
BtwoB
ORG
payments a market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
. Tremendous promise and the
BWB
ORG
area the card business as in the the elements of the B to B space which are served by cards are doing well are they doing very well and it's in the small business space and the mid market it's in the large corporate space all of them do really well on the accounts people side I would say we're in the building And you're aware about building an open loop environment to enable payments on accounts payable rails Where is the opportunity in that space is? Different to consumer payments where there is a global standard the global standard is
Top line for me is
Visor
PERSON
and confident. Conciliary. The rule of the chief financial officer has actually changed value dramatically over
this 20 plus year
DATE
tenure that I've had you know in the past it was more of a function of you know let's make sure the numbers are good let's make sure we got a great control environment let's make sure we're actually able to close the books on time let's We've got all the financial elements of the business in order. The job of the
CFO
ORG
in in our view in my view is a function of making sure we are creating the right linkage. What the purpose of the businesses, what the strategy of the business is, Delivering on the financial returns for the company all while driving long term shareholder town. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplishment of the strategy of the
Mastercards
NORP
core business is no surprise cards carded products currently account for
over half
CARDINAL
the company's revenue the company said ambitious growth targets it is
2021
DATE
investor
day
DATE
committing to expand this core and to diversify beyond it. Hey any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta recognize not only where Takes time to implement And it's a difficult you'll get some you'll get it right sometimes you'll get it wrong sometime but hopefully you're getting it right more often than you can get wrong and you're working with through that. Forecasting preferences is complicated by an uncertain economy. Confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis for
Mastercard
ORG
in its peers. To watch people often perceive I think famous as an industry it will be quite resilient in the downtown Generally speaking Even during a recession the amount that consumers spend actually does not go down. It continues to grow. I think the thing that people are worried about more in the payments industry is kinda how does the mix of spending change? The
first
ORDINAL
thing is that typically happens if you're going into a recession environment is people tend to pull back on discretionary categories of spend they move into the non discretionary categories of span. Food, they're pivot into rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which run debit and credit are exactly the same the technology is the same the distribution models the same Moving into more environment.
One
CARDINAL
area that master card has been moving vigorously into is
BtwoB
ORG
payments a market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
we think there's tremendous promise and the
BWB
ORG
area the card business as in the the elements of the B to B space which are By cards. Are doing well are they doing very well and it's in the small business space and the mid market it's in the large corporate space all of them do really well on the accounts payable side I would say we're in the build phase and here whereabout building and open loop environment to enable payments on accounts payable rails Where is the opportunity in that space is? Different to consumer payments where there is a global standard. The global standard is
Mastercard
GPE
. The global standard ah card payments because that's been established. That isn't quite established yet and be And I think the more benefits we bring into the payments that are easier than just making a really complicated cross border payment I think we will find our way there and you're gonna see an explosion of creativity a lot of other companies Pursuing new opportunities takes capital
Mastercard
ORG
has spent
billions
CARDINAL
acquiring companies that add capacity and diversified its infrastructure. Acquisitions and partnerships have helped master card offer more value added services to their clients tap in
You're conciliary. The rule of the chief financial officer is actually changed value dramatically over
this 20 plus year
DATE
10 year
DATE
that I've had you know in the past it was more of a function of you know let's make sure the numbers are good let's make sure we got a great control environment let's make sure we're actually able to close the books on time let's We've got all the financial elements of the business in order. The job of the
CFO
ORG
in in our view in my view is a function of making sure we are creating the right linkage What the purpose of the business is what the strategy of the business is Delivering on the financial returns for the company all while driving long term shareholder value. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplishment Strategy with the company. Mastercards core business is no surprise cards credit products currently account for
over half
CARDINAL
the company's revenue the company said ambitious growth targets it is
2021
DATE
investor
day
DATE
committing to expand this core and to diversify beyond it. We've been on a
6 year
DATE
strategy to be a multi-rail company in plain
English
LANGUAGE
that means whichever way you pay we will enable that despite the fact that card is an hour name it's essentially any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta recognize Takes time to implement And it's a difficult you'll get some you'll get it right sometimes you'll get it wrong sometime but hopefully you're getting it right more often than you can get wrong and you're working with through that. Forecasting preferences is complicated by an uncertain economy consumer confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis To watch people often perceive I think famous as an industry it will be quite resilient in any downtown Generally speaking Even during a recession the amount that consumers spend actually does not go down. It continues to grow. I think the thing that people are worried about more in the payments industry is kind of how does the mix of spending change? The
first
ORDINAL
thing that typically happens if you're going into recession environment is people tend to pull back on discretionary categories of span. They move into The non-discretionary categories are spent Food. They're pivot into rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which run debit and credit are exactly the same the technology is the same the distribution models the same So those those areas don't necessarily change by virtue of moving into more for debit or credit.
One
CARDINAL
area that
Mastercard
GPE
has been moving vigorously into is
BtwoB
ORG
payments a market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
Promise
PERSON
and the BW area the card business as in the the elements of the B to B space which are served by cards are doing well are they doing very well and it's in the small business space and the mid market it's in the large corporate space all of them do really well on the accounts people side I would say we're in the building fees and here About building an open loop environment to enable payments on accounts payable rails. Where is the opportunity in that spaces? Different to consumer payments where there is a global standard. The global standard is
MasterCard
ORG
. The global standard ah comp payments because that's been established That isn't quite established yet and be to be and I think the more benefits we bring into the payments that are easier than just making a really complicated cross border payment I think we'll find our way there and we're gonna see and explosion of Lot of other companies coming in and using those rails innovating on top of them. Pursuing new opportunities takes capital. Has spent
billions
CARDINAL
acquiring companies that add capacity and diversify its infrastructure. Acquisitions and partnerships have helped master card offer more value added services to their clients tapping into a lucrative revenue stream What we call services which includes data and
Takes time to a woman Is it difficult? More often than you can you're wrong Forecasting preferences is complicated by an uncertain economy consumer confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis for
Mastercard
ORG
in its peers. To watch people often perceive I think famous as an industry it will be quite resilient in downtown Generally speaking Even during a recession the amount that consumers spend actually does not go down. It continues to grow. I think the thing that people are worried about more in the payments industry is kind of how does the mix of spending change? The
first
ORDINAL
thing that typically happens if you're going into a recession environment is people tend to pull back on discretionary gallery this man they move into the non discretionary categories of span
Food
PERSON
, they're pivot into rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which run debit and credit are exactly the same. The technology is the same, the distribution models the same So those those areas don't necessarily change by virtue of moving into more for debit or credit in the moment.
One
CARDINAL
area that master card has been moving vigorously into is
BtwoB
ORG
payments. A market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
. Promise and the BW area the card business as in the the elements of the B to B space which are served by cards. Are doing well? Are they doing very well? And it's in the small business space and the mid market. It's in the large corporate space. All of them do really well. On the accounts people side, I would say we're in the build fees. And here About building an open loop environment to enable payments on accounts payable rails Where is the opportunity in that space is? Different to consumer payments where there is a global standard. The global standard is
MasterCard
ORG
. The global standard ah card payments because that's been established. That isn't quite established yet and And I think the more benefits we bring into the payments that are easier than just making a really complicated cross border payment I think we will find our way there and we're gonna see and explosion of creativity a lot of other companies
Innovating
GPE
on top of Pursuing new opportunities takes capital Has spent
billions
CARDINAL
acquiring companies that add capacity and diversify its infrastructure. Acquisitions and partnerships have helped master card offer more value added services to their clients tapping into a lucrative revenue stream. What we call services which includes data insights consulting manage services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company Wow. Yeah. So, it's not insignificant. So, often times people think miles to card and think card. Very important but there's a very different part of
Mexico
GPE
as well. From a balanced sheep perspective,
MasterCard
ORG
has maintained a healthy leverage ratio even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. We don't go in and say, well, right now, valuations are lower than they were
a year ago
DATE
. Let's Buy something. That is that is an opportunistic approach. It doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint? What are inherent capable of these we as a company have? What are the gaps in our capabilities to meet that strategy? And then follows gaps is the best to build. Or partner. We're out there and we're trying to find a right companies together and it's gonna make sure that we have a clear view on short and long-term synergies and so forth. And then we both talked to shareholders and to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
MasterCard
ORG
's capital allocation strategy. It's included
annual
DATE
share buybacks insteadly increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus share buybacks and dividends because master card is traditionally had rob Program in rewarding shareholders. Right.
First
ORDINAL
call of capital is towards growth of the business After we have done that it's about making sure we're being good towards the capital and returning excess cash to shareholders with a bias towards share buybacks. And then once
The college people rails Where is the opportunity in that space is
Different
ORG
to consumer payments where there is a global standard. The global standard is
MasterCard
ORG
. The global standard ah card payments because that's been established. That isn't quite established yet and B to B. And I think the more benefits we bring into the payments Are easier than just making a really complicated cross border payment. I think we will find our way there and we're gonna see and explosion of creativity. A lot of other companies coming in and using those rails innovating on top of them. Pursuing new opportunities takes capital.
MasterCard
ORG
has spent
billions
CARDINAL
acquiring companies that add capacity and diversified its infrastructure. Acquisitions and partnerships have helped mastercard offer more value added services to their clients tapping into a lucrative revenue stream. What we call services which includes data insights consulting manage services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company. Wow. Yeah. So, it's not insignificant. So, often times people think miles to cart and think god. Very important but there's a very different part of massacre as well. From a balance sheep perspective,
MasterCard
ORG
has maintained a healthy leverage ratio even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. We don't go in and say, well, right now, evaluations are lower than they were
a year ago
DATE
. Let's Doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint What are inherent capable these we as a company have what are the gaps in our own capabilities to meet that strategy and then follow those gaps is the best to build Or partner. We're out there and we're trying to find the right companies together and it's gonna make sure that we have a clear view on short and long-term synergies and so forth. And to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
MasterCard
ORG
's capital allocation strategy. It's included
annual
DATE
share buybacks and steadily increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus share buybacks and dividends because master card is traditionally had rob Program in rewarding shareholders. Right.
First
ORDINAL
call of capital is towards growth of the business Capital and returning excess cash to shareholders with a bias to a share buybacks. And then once you start to come to say I have dealt with my strategic priorities I either have invested my organic growth or in acquisitions then access cash we will return back Generally with a preference for buybacks over dividend Gives a small flexibility but that's been a good model for us. It's been working well and well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not Particularly on the small ticket items. And later how master
Cryptocurrencies
ORG
. In the crypto world we play the role ah as an on ram. This is
Bloomberg
PERSON
. Markets are preparing to close but the day is not over yet. No. You need top analyst to bring you exclusive global insight into cross asset markets. Bitcoin. It's gonna be short term. Such a mirror joint master card is group executive in corporate treasure in
2010
DATE
. Over
the next decade
DATE
, he took on several different roles before being appointed chief financial officer in
2019
DATE
. That's a very different path than the one he started out on. Hey went to school there I went undergrad there I went to the family business there it's a textile business which my grandfather started and my dad
Michael
PERSON
took over and then my brother and I got into eh
Inquiring companies that add capacity and diversified infrastructure. Acquisitions in partnerships have help master card offer more value added services to their clients tapping into a lucrative revenue stream What we call services which includes data insights consulting manage services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company. Wow. Yeah. So, it's not insignificant. So, often times people think miles to card and think card. Very important but there's a very different part of massacre as well. From a balance sheep perspective,
Mastercard
ORG
has maintained a healthy leverage ratio even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. We don't go in and say, well, right now evaluations are lower than they were
a year ago
DATE
. Let's go Something. That is, that is an opportunistic approach. It doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint? What are inherent capabilities we as a company have? What are the gaps in our capabilities to meet that strategy? And then follows gaps Is it best to build Or partner. And then we're out there and we're trying to find a right companies together. It's gonna make sure that we have a clear view on short and long term synergies and so forth. And then we both talk to shareholders and to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
Mastercard
ORG
's capital allocation strategy. It's included
annual
DATE
share buy Insteadly increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus share buybacks and dividends because master card is traditionally had robust program in rewarding shareholders. Right. As towards growth of the business. Done that It's about making sure we're being good stewards of capital and returning excess cash to shareholders with a bias to a share buybacks. And then once you start to come to say I have dealt with my strategic priorities I either have invested my organic growth or in acquisitions then access cash we will return back Leave with a preference for buybacks over dividend because it gives a small flexibility but that's been a good model for us. It's been working well and it's been well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not Well it's really made a difference on has been in terms of how it's driving a shift from cash to the electronic payment particularly on the small ticket items and later how mastercard
Cryptocurrencies
ORG
. In the crypto world we play the role as an on ram. This is
Bloomberg Markets
ORG
are preparing to close but the day is not over yet.
45%
PERCENT
. Upgraded
today
DATE
to overweight. You need top analysts to bring you exclusive global insight into cross asset markets. Hey it's gonna be short term. Such a mirror joined
Mastercard
PERSON
as group executive in corporate treasure in
2010
DATE
. Over
the next decade
DATE
, he took on several different roles before being appointed chief financial officer in
2019
DATE
. That's a very different path than the one he started out on. Hey grew up in
India
GPE
I went to school there went undergrad there I worked with the family business there it's a textile business which my grandfather started and my dad took over and then my brother and I got into and hey what put them for
three and a half years
DATE
then I came here for business school The moment of truth came on graduation day. Hey, dad. Got on the phone. I'm looking forward to having you back home. My brother was older than I am. Went to business school as well and went back home and worked with my dad. Got on the phone. Congratulations. What are you gonna do with your life? Yup that's what dad wants you to do. What do you wanna do? And then
In partnerships have helped
MasterCard
ORG
offer more value added services to their clients tapping into a lucrative revenue stream. What we call services which includes data insights consulting manic services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company. Wow. Yeah. So, it's not insignificant. So, often times people think mass required and think card. Very important but there's a very different part of massacre as well. From a balance sheep perspective,
Mastercard
ORG
has maintained a healthy leverage ratio even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. We don't go in and say, well, right now, valuations are lower than they were
a year ago
DATE
. Let's go Something. That is, that is an opportunistic approach. It doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint? What are inherent capabilities we as a company have? What are the gaps in our neuron capabilities to meet that strategy? And then photos gaps Is it best to build Or partner and then we're out there and we're trying to find the right companies together and it's gonna make sure that we have a clear view on short and long-term synergies and so forth. And to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
MasterCard
ORG
's capital allocation strategy It's included
annual
DATE
share buybacks and steadily increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus your buybacks and dividends because master card is traditionally had robust program in rewarding shareholders. Right.
First
ORDINAL
call of capital is towards growth of the business. After we have done that, it's about making sure we're being good students And returning access cash to shareholders with a bias to a share buybacks. And then once you start to come to say I have dealt with my strategic priorities I either have invested my organic growth or in acquisitions then access cash we will return back
Preference
ORG
for buybacks over dividend because it gives a small flexibility but that's been a good model for us. It's been working well. It's been well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not What it's really made a difference on has been in terms of how it's driving a shift from cash to that
24
CARDINAL
payment. Particularly on the small ticket items. And later how
MasterCard Cryptocurrencies
ORG
In the crypto world we play the role as an on ram. This is
Bloomberg
PERSON
. Markets are preparing to close but the day is not over yet. Lot of volatility right now.
Upgra
PERSON
You need top analyst to bring you exclusive global Hey Hey portal is it gonna be short term Such a mirror joint mastercard is group executive in corporate treasure in
2010
DATE
. Over
the next decade
DATE
, he took on several different roles before being appointed chief financial officer in
2019
DATE
. That's a very different path than the one he started out on. Hey grew up in
India
GPE
hey went to school there went undergrad there I worked with the family business there it's a textile business which my grandfather started and my dad
Malco
GPE
took over and then my brother and I got into and hey what put them for
three and a half years
DATE
then I came here for business school The moment of truth came on graduation day. My dad got on the phone. I'm looking forward to having you back home. My brother was older than I am. He went to business school as well and went back home and worked with my dad. Got on the phone. What are you gonna do with your life? And I'm going, well, why are we having this discussion?
Dad
PERSON
wants me to come home and work with the family business. He's like, yup, that's what dad wants you to do. What do you wanna do? Hey give him a chance I'd love to work in finance in in the
UK
GPE
It's about making sure we're being good stewards of capital and returning excess cash to shareholders with a bias to a share buybacks. And then once you start to come to say I have dealt with my strategic priorities I either have invested in my organic Or an acquisitions then access cash we will return back
Preference
ORG
for buybacks over dividend because it gives a small flexibility but dad's been a good model for us. It's been working well and well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not Particularly on the small ticket items and later how
MasterCard Cryptocurrencies
ORG
. In the crypto world we play the role as an on ram. This is
Bloomberg Markets
ORG
are preparing to close but the day is not over yet. Lot of volatility right now. You need top analysts to bring you exclusive global insight into cross asset markets. Bitcoin ain't paying along
today
DATE
. It's gonna be short term. Close
weekdays
DATE
on
Bloomberg
PERSON
. Such a mirror joint mastercard is group executive in corporate treasure in
2010
DATE
. Over
the next decade
DATE
, he took on several different roles before being appointed chief financial officer in
2019
DATE
. That's a very different path than the one he started out on. Hey grew up in
India
GPE
I went to school there I went undergrad there I went to the family business there it's a textile business which my grandfather started and my dad
Malco
GPE
took over and then my brother and I got into and hey what put them for
three and a half years
DATE
then I came here for business school The moment of truth came on graduation day. My dad got on the phone I'm looking forward to having you back home. My brother was older than I am. Went to business school as well and went back home and worked with my dad. Got on the phone congratulated me and said
Gon
ORG
na do with your life. And I'm going, well, why are we having this discussion?
Dad
PERSON
wants me to come home and work with the family business. He's like, yup, that's what dad wants you to do. What do you wanna do? Hey give him a chance I'd love to work in finance in in the
US
GPE
General motors where he worked for over a decade Then it was on to the energy industry it has corpo Before finding his way to
Mastercard
GPE
.
Today
DATE
, my dad couldn't be prouder of the fact that you know, I chose the path I did. Obviously, he misses the fact that we're not there as a family but that's just what I like, right? We all gotta grow in
Blossman Groom
PERSON
. Accepted the beginning. It took him
all 30 minutes
TIME
to get there. When
Mara
PERSON
gets together with his team and the employee cafe and
Mastercard
PERSON
's campus It's clear that he said his element. Well, more important, more fun stuff. What's the plan for
the weekend
DATE
? And of course, the cafe provides a demonstration of the tap and co technology that's changed the game for payment companies. Could I just go to regular coffee with milk please? Of this. Yeah. Okay that would be
571
CARDINAL
. You got it. We're gonna make this work. There we go. I think contactless is a very powerful catalyst for accelerating gastrobansion.
Last 2 years
DATE
but we have seen in the
US
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stripe which was the old way of doing business. We on revenues which are quite Across both of those. The revenue potential and upside for us comes from the fact that now more spend is being done on card based on supreme and then was being done in the past. So we're converting that cash over to electronic officer payment. Which is where the revenue comes from If contact list payments is the current revolution sweeping the payments industry what's the next one? I think You smile. Biometrics I think that's where it's gonna go. I think we've reached that point of people are sick of too many passwords. People are sick of typing in stuff and there's also too many wallets and other ideas and stuff that is around. So why don't you just you everybody has a smile so just play with your smile there you go how much you investing in that how quickly do you see that becoming the next tap and go yeah so look I I think this is gonna take a while these things have an adoption code which typically is fairly flattened the early part and then you start to see some levels deep in this Master The company has opened innovation centers in
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versus the other we We wanna be at the inflection point for them to write on. In your Can you act like bond
James Bond
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what are the queue movies and like the laboratories you walk in and they you know you sort of face off and clear the system and they serve to this Who can do that? No that's not me. Coming up how
MasterCard
ORG
has embraced the brave new world of cryptocurrency with all its ups and downs. Principles we think we're in really good And such an mirror tells me what advice he'd offer a
CFO
ORG
just starting out in the job. I think it's important to stay calm. It's a board to recognize that change is going to happen. You can't fight change. This is bloomberg. Imagine simply climbing a cable into space. The concept is known as the space elevator
And there's also too many wallets and other ideas and stuff that is around. So why don't you just you everybody has a smile. So just play with your smile. There you go. How much are you investing in that? How quickly do you see that becoming the next tap and go? Yeah. So look I think this is gonna take a while. These things have an adoption code which typically is fairly flattened the only part and then you start to see some levels deep in this. Master The company has opened innovation centers in
Australia
GPE
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India
GPE
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Europe
LOC
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the United States
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. These are spaces where we draw in customers where we draw the local community. We have them in big cities where the latest technology is the players are all around us. In
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what are the queue movies and like the laboratories you walk in and they you know you sort of face off and clear the system and they drove to this And I'm not I'm not one of them. No, that's not me. Coming up how mastercard has embraced the brave new world of cryptocurrency with all its ups and downs. We think we're in really good And such an Mara tells me what advice he'd offer a
CFO
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just starting out in the job. To stay calm. It's a border to recognize that change is going to happen. You can't fight change. This is blooper
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has enhanced search on the terminal to deliver what you need when you need it now Everyday
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in the command line. Compare financials Find people analyze Marcus You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Are we in some sort of calculation fears moment people are talking about that
all day
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yesterday Like many of its counterparts and the payments and financial services industry Artist developed products in partnerships that bring cryptocurrencies into its networks. From the payments and payment system perspective the the Players and and and members that make up.
Spaces where we draw in customers where we draw the local community. We have them in big cities where the latest technology is the players are all around us. In
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what are the queue movies and like the laboratories you walk in and they you know you sort of face off and clear the system and they prove to this Who can do that? I'm not one of them. No, you? No, that's not me. Coming up how mastercard has embraced the brave new world of cryptocurrency with all its ups and downs. We think we're in really good And such an mirror tells me what advice he'd offer a
CFO
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just starting out in the job. I think it's important to stay calm. It's a board to recognize that change is going to happen. You can't fight change. This is bloomer. Imagine simply climbing a cable into space. The concept is known as the space elevator. Not only could it significantly change how we leave planet earth But it could also completely transform humanities relationship with space. And there are scientists who think we could have already built it We have the material. We have the technology. We have the lasers. We have the climbers. We have all of them. Private entity wants to build it. Or a government Colonizing in the space how really spreading on his face oh really change our society over
the next 50 to 200 years
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It'll be completely different.
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has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
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in the command line Compare financials. Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Let's just be honest we've had sort of a shift in are we in some sort of sipulation fears moment people are talking about that
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he wanted the queue movies and like the laboratories we walk in and they you know you sort of face off and clear the system and they serve to this Who can do that? No that's not me. Coming up how
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has embraced the brave new world of cryptocurrency with all its ups and downs. We think we're in really good And such an mirror tells me what advice he offers
CFO
ORG
just starting out in the job. I think it's important to stay calm. I think it's important to recognize that change is going to happen. You can't fight change. This is bloombird. Imagine symphony climbing a cable into space. The concept is known as the space elevator. Not only could it significantly change how we leave planet earth But it could also completely transform humanities relationship with space. And there are scientists who think we could have already built it. We have the material. We have the technology. We have the lasers. We have the climbers. We have all of it. If a private entity wants to build it Or a government. Colonizing in the space how really spreading on the space will really change our society over
the next 50
DATE
to It'll be completely different.
Bloomberg
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has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Narrative. Let's just be honest. We've had sort of a shift in are we in some sort of calculation, fears, moment, people are talking about that
all day
DATE
yesterday
DATE
. Like many of its counterparts and the payments and financial services industry Artist developed products and partnerships that bring cryptocurrencies into its networks. From the payments and payment system perspective the the Players and and members that make up that ecosystem are really agnostic. To them, crypto is just another current literally. Just another asset. The overall revenue contribution is still so small. It's very early but if if I'm a hard company, it's better to invest Partner with some of these companies. For future revenue growth rate versus kind of sitting on the sidelines.
Crypto
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Imagine simply climbing a cable into space. The concept is known as the space elevator. Not only could it significantly change how we leave planet earth But it could also completely transform humanities relationship with space. And there are scientists who think we could have already built it We have the material. We have the technology. We have the lasers. We have the climbers. We have all of them Hey He wants to build it. We have no clue how Really change our society over
the next 50 to 200 years
DATE
. It'll be completely different.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now Everyday
English
LANGUAGE
in the command line. Compare financials Find people. You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Are we in some sort of calculation, fears, moment, people are talking about that
all day
DATE
yesterday
DATE
. Like many of its counterparts and the payments and financial services industry Artist developed products in partnerships that bring cryptocurrencies into its networks. From the payments and payment system perspective the the Players and and members that make up that ecosystem are really agnostic. To them, crypto is just another currency literally. Just another asset.
Point Contribution
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is still so small. Very early Hey partner with some of these companies for future revenue growth made versus kind of sitting on the sidelines
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the last 50 years
DATE
. For everything we've been working with regulated financial institutions on. And so which is why when we got into the space the first thing we did was define principles. And we will keep abiding by those principles and what we do. Yeah I feel happy because we're in the discussion We're shaping that ecosystem And then 1 day it look like we'll be having it done in many other spaces over years of
the past years
DATE
. Is a leader within a company that has the power and reach to shape ecosystems and he'll be making strategic and financial decisions that shape the business. I wanted to know what he sees when he looks ahead. What's the opportunity for
MasterCard
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in
the next 10 years
DATE
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Bucket
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Mastercard
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over
the next 10 years
DATE
that keep you open
night
TIME
? Plugged in on what's going on from a technology innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction. We've got to engage with people who could potentially be disintermediators competitors to let them know what value we can bring
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Crypto
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Wanna
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spend money as in fear currency to buy crypto and react as the off ramp and the offer amp is when people wanna cash it We help them actually gain access to be able to use their crypto balances everywhere masterclass accepted. We engage with central banks on central bank digital currencies. We engage with governments on how a policy could look like, how regulation could like, look like, Engage with the startup community and say come on in let's sit around the table
Hubs
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and we discuss What solution actually is needed by whom and how we can bring it together. They have the greatest idea but the greatest idea, it's a path to scale. That's what we can bring. Is there a potential liability because of the volatility because of how And certain other cryptocurrencies have been painted. Is there any liability for
Mastercard
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it must meet consumer protection requirements. It must meet the laws of the land. And this is not new news to us. We've done this in the space for
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the past years
DATE
.
Mirror
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is a leader within a company that has the power and reach to shape ecosystems and he'll be making strategic and financial decisions that shape the business. I wanted to know what he sees when he looks ahead. Most excites There's still remains a very sizable consumer payments opportunity which we stand very well poised to actually capitalize on. This is the trend of the shift from cash to electronic phones or payment. If you think about it globally, there's still
a ton
QUANTITY
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second
ORDINAL
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number three
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Mastercard
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over
the next 10 years
DATE
that keep you up at
night
TIME
? Plugged in on what's going on from a technology and innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction We've got to engage with people who could potentially be Mediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
number one
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two
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the end of the day
DATE
, sitting in my role is the
CFO
ORG
. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on it.
Crypto
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one
CARDINAL
example. Across border payments, whatever it might be. In the crypto world we play the role as an on ram so people use
MasterCard
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called products to buy crypto or debit and credit products so that's the on ramp if people wanna spend money as in fear currency to buy crypto and react as the off ramp and the offer amp is when people wanna in cash should We help them actually gain access to be able to use their crypto balances everywhere masterclass accepted. We engage with central banks on central bank digital currencies we engage with governments on how a palsy could look like how regulation could like look like Engage with the startup community and say come on in let's sit around the table And we discuss What solution actually is needed by whom and how we can bring it together. They have the greatest idea but the greatest idea, it's a path to scale. That's what we can bring. Is there a potential liability because of volatility because of how And certain other cryptocurrencies have been painted. Is there any liability for
Mastercard
GPE
? Yeah. Well, too long as we follow our principles, we think we're in really good shape. And the principles we care deeply about our Stability as instability of the currency in question Point number
two
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it must meet consumer protection requirements Me the laws of the land. And this is not new news to us. We've done this in the space for
the last 50 years
DATE
. For everything we've been working with regulated financial institutions on. And so which is why when we got into the space the first thing we did was to find principles. And we will keep abiding by the principles and what we do. Yeah I feel happy because we're in the discussion We're shaping that ecosystem And then 1 day it'll look like we'll be having it done in Many other spaces over years over
the past years
DATE
Search and mirror is a leader within a company that has the power and reach to shape ecosystems and he'll be making strategic and financial decisions that shape the business. I wanted to know what he sees when he looks What's the opportunity for
MasterCard
ORG
in
the next 10 years
DATE
but most excites you? Are very sizable consumer payments opportunity Which we stand very well poised to actually capitalize on. This is the trend of the shift from cash to electronic functional payment. If you think about it globally, there's still
a ton
QUANTITY
of cash. Which remains to be left on a fine. And that that opportunity is huge The
second
ORDINAL
pillar for me is around We have identified over
the past few years
DATE
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number three
CARDINAL
is around services it goes back to our
Insights
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analytics are broad management capabilities and everything we're doing that space and then the last piece around new networks which is around open banking and digital light entity. What are some of the challenges for mastercard over
the next 10 years
DATE
that keep you open
night
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? On what's going on from a technology innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction We've got to engage with people who could potentially be Disintermediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
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DATE
, sitting in my role is the
CFO
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. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do everyday what's the biggest change that you see your role having over
the next 10
DATE
Principles we think we're in really good shape and the principles we care deeply about our Stability as instability of the currency in question Point number
two
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it must meet consumer protection requirements It must be the laws of the land. And this is not new news to us. We've done this in the space for
the last 50 years
DATE
. For everything we've been working with regulated financial institutions on. And so which is why when we got into the space the first thing we did was to find principles and we will keep abiding by those principles and what we do. Yeah I feel happy because we're in the discussion We're shaping that ecosystem And then 1 day it'll look like we'll be having done in many other spaces over years over
the past years
DATE
. Is a leader with an accompany that has the power and reach to shape ecosystems and he'll be making strategic and financial decisions that shape the business. I wanted to know what he sees when he looks ahead. What's the opportunity for Mastercard in
the next 10 years
DATE
but most excites There still remains a very sizable consumer payments opportunity which we stand very well poised to actually capitalize on. This is the trend of the shift from cash to electronic funds or payment. If you think about it globally, there's still
a ton
QUANTITY
of cash. Which remains to be electron And that that opportunity is huge The
second
ORDINAL
pillar for me is around
Identified
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over
the past few years
DATE
a sizable total addressable market in what we call new payment flows bucket
number three
CARDINAL
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Insights Analytics
PERSON
are broad management capabilities and everything we're doing that space and then the last piece around you networks which is around open banking and digital light entity. What are some of the challenges for
Mastercard
ORG
over
the next 10 years
DATE
that keep you open
night
TIME
? Technology innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction. We've got to engage with people who could potentially be Mediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
number one
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. Number
two
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DATE
, sitting in my role is the
CFO
ORG
. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do everyday. What's the biggest change that you see your role having over
the next 10 years
DATE
? Honestly I'm not really in the business of predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on making sure We're leading from the front on executing but also failing fast and that's where a
CFO
ORG
can play a big role And by that I mean You're not always gonna win. There are things you're gonna do. Hopefully you get more right than wrong. But recognizing things which are not working out. And making sure you actually feel fast on them. And get out of them. Because you can get you can fall in love with stuff. Keep doing it. Keep wasting resources don't really realize that it's not gonna pay off and I think the imposes around that is gonna only increase for that
Resource
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environment. What advice would you give a
CFO
ORG
today
DATE
? Hey I think it's important to stay calm I think it it's important to recognize that change is going to happen you can't fight change What really matters is how you can get up and actually deal with that change. That's super important for a
CFO
ORG
. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. I noticed I've said nothing about financials and I said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are table sticks so you gotta make sure that stuff happens. You gotta level technology. You gotta drive efficiency in the business. You gotta get the numbers right. You gotta have a good control in the moment. But what's gonna call you apart is the is the other elements which I spoke If
MasterCard
ORG
can meet ambitious goals for growth in its poor business And build on straight
We're gonna walk in the other direction We've got to engage with people who could potentially be Mediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
number one
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. Number
two
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is Look I mean the world is getting More into a regulatory environment where regulation regulators are playing a bigger role. Nationalism is playing a bigger role. It's important for us to continue do everything we're doing by being gamed local. It's important to be a global company but be deemed local and that's gonna be important for us to execute on because at
the end of the day
DATE
, sitting in my role is
this year four
DATE
. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do every day what's the biggest change that you see your role having over
the next 10 years
DATE
? That's really good question. Predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on making sure Leading from the front on executing but also failing fast and that's where a
CFO
ORG
can play a big role And by that I mean You're not always gonna win. There are things you're gonna do Hopefully you get more right than wrong but recognizing things which are not And making sure you actually feel fast on them and get out of them because you can get you can fall in love with stuff Keep doing it. Keep wasting resources. Don't really realize that it's not gonna pay off. And I think the emphasis around that is gonna only increase for that. What advice would you give a
CFO
ORG
today
DATE
? Hey I think it's important to stay calm. I think it it's important to recognize that change is going to happen. You can't fight change. What really matters is how you can get up and actually deal with that change. That's super important for a
CFO
ORG
. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. I noticed I've said nothing about financials and I've said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are able to stick so you've gotta make sure that stuff happens. You gotta level technology. You gotta drive efficiency in the business. You gotta get the numbers right. You gotta have a good control in the moment. But what's gonna call you apart is the is the other elements which I spoke If
MasterCard
ORG
can meet ambitious goals for growth in its poor business Build on strategies that are taking payments to the next level such in merrow will deserve a lot of the credit. I'm
Lisa Obramoid's
PERSON
this is
Bloomberg
PERSON
. What do formula
one
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cars and your local supermarket have in common? Well, strange as it sounds, they might both be using the same technology. A lot of innovation has trickled down from the world of high-tech engines and it hasn't just found a new life in
Cars
LOC
. Engineers from
Williams
PERSON
are using their knowledge from
nine
CARDINAL
constructors championships working with company air foil to help reduce the energy consumption of supermarkets. The device they're building is based on the design of an
F one
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exhaust that could allow cars to generate the same power using
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At
the end of the day
DATE
sitting in my rollers
this year
DATE
four
CARDINAL
Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do everyday. What's the biggest change that you see your role having over
the next 10 years
DATE
? Honestly I'm not A business of predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on making sure We're leading from the front on executing but also feeling fast and that's where a
CFO
ORG
can play a big And by that I mean You're not always gonna win. There are things you're gonna do. Hopefully you get more right than wrong. But recognizing things which are not working out. And making sure you actually feel fast on them and get out of them. Because you can get you can fall in love with stuff. Keep doing it. Keep wasting resources. Don't really realize that it's not gonna pay off. And I think the inputs is around that is gonna only increase for that. Resource environment. What advice would you give a
CFO
ORG
today
DATE
? Hey I think it's important to stay calm I think it's a border to recognize that change is going to happen. You can't fight change. What really matters is how you can get up and actually deal with that change. That's super important for our
CFO
ORG
. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. And notice I've said nothing about financials and I've said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are table sticks. You gotta make sure that stuff happens. You gotta level technology. You gotta drive efficiency in the business. You gotta get the numbers right. You gotta have a good control in the moment. But what's gonna call you apart is the is the other elements which I spoke If
Mastercard
GPE
can meet ambitious goals for growth in its core business
Strategies
ORG
that are taking payments to the next level such in merrow will deserve a lot of the credit. This is
Bloomberg
PERSON
. What do formula
one
CARDINAL
cars and your local supermarket have in common? Well, strange as it sounds, they might both be using the same technology. A lot of innovation has trickled down from the world of high-tech engines and it hasn't just found a new life in road Technology in them is also helping to cool down our produce aisles engineers from
Williams
PERSON
are using their knowledge from
nine
CARDINAL
constructors championships working with company air foil to help reduce the energy consumption of supermarkets the device they're building is based on the design of an
F one
PRODUCT
They estimate they can reduce supermarket energy consumption by
25%
PERCENT
.
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innovation from
F one
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Works
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by storing energy of the car to celebrating in the battery for later use. That's not enough. System looking to harness the heat produce from breaking and the engine exhaust that could allow cars to generate the same power using
30%
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less fuel. Climate change. We make it very transparent to the shopper before they accept an order. What's the order is gonna look like? How much we're gonna pay them and how much like the consumer is paying them? And so they can decide whether they take an order or was else it refuse it. And that's the kind of flexibility that workshop is
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But what really matters is can you really live over and execute? And we've gotta stay focused on execution. And that's what we do every day. What's the biggest change that you see your role having over
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? That's really good question. Honestly, I'm not The business of predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on
Sure Leading
ORG
from the front on executing but also failing fast and that's where a
CFO
ORG
can play a big role And by that I mean You're not always gonna win. There are things you're gonna do Hopefully you get more right than wrong but recognizing things which are not working out And making sure you actually feel fast on them and get out of them because you can get you can fall in love with stuff Keep doing it. Keep wasting resources. Don't really realize that it's not gonna pay off. And I think the emphasis around that is gonna only increase for that. Capital resource environment. What advice would you give a
CFO
ORG
today
DATE
? I I think it's important to stay calm. I think it it's important to recognize that change is going to happen. You can't fight change. What really matters is how you can get up and actually deal with that change. That's super important. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. And notice I've said nothing about financials and I've said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are table sticks. You gotta make sure that stuff happens. You gotta leverage technology. You gotta drive efficiency in the business. You gotta get the numbers right. You gotta have a good control environment. What's gonna call you apart is the is the other elements which I spoke man. If
Mastercard
PERSON
can meet ambitious goals for growth in its core business
Strategies
ORG
that are taking payments to the next level such in Mary will deserve a lot of the credit. I'm
Lisa Bramoids
PERSON
. This is
Bloomberg
PERSON
. What do formula
one
CARDINAL
cars and your local supermarket have in common? Well, strange as it sounds, they might both be using the same technology. A lot of innovation has trickle down from the world of high-tech engines and it hasn't just found a new life in
F one
PRODUCT
cars have long been thought of has the peak of cool in technology in them is also helping to cool down our produce aisles engineers from
Williams
PERSON
are using their knowledge from
nine
CARDINAL
constructors championships working with company air foil to help reduce the energy consumption of supermarkets the device they're building is based on the design of an
F one Cars
PRODUCT
rear wing it attaches to fridges to keep more cool air in the unit they estimate it can reduce supermarket energy consumption by
25%
PERCENT
one innovation from
F one
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F one
PRODUCT
is now looking at hers or a thermal energy recovery system looking to harness the heat produce from breaking and the engine exhaust That could allow cars to generate the same power using
30%
PERCENT
less fuel. Climate change. We make it very transparent to the shopper before they accept an order. What's your order is gonna look like? How much we're gonna pay them and how much like the consumer is paying them? And so they can decide whether they take an order or is also refuse it. And that's the kind of flexibility that our Really value and the kind of transparency that they want. Are you seeing a labor shortage right now? And what are you doing to combat that? Demographic of shoppers is completely different from food delivery and rate sharing were
70%
PERCENT
women and
half
CARDINAL
of them moms and that's because of
Hey Facebook is the other
one
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switch at school? If
Mastercard
PERSON
can meet ambitious goals for growth in its core business
Strategies
ORG
that are taking payments to the next level such in Mary will deserve a lot of the credit.
Lisa Bromoids
PERSON
this is
Bloomberg
PERSON
. What do formula
one
CARDINAL
cars and your local supermarket have in common? Well, strange as it sounds, they might both be using the same technology. A lot of innovation has trickled down from the world of high-tech engines and it hasn't just found a new life in road
F one
PRODUCT
cars have long been thought of has the peak of cool in technology in them is also helping to cool down our produce aisles engineers from
Williams
PERSON
are using their knowledge from
nine
CARDINAL
constructors championships working with company air foil to help reduce the energy consumption of supermarkets the device they're building is based on the design of an
F Cars
LOC
rear wing it attaches to fridges to keep more cool air in the unit they estimate it can reduce supermarket energy consumption by
25%
PERCENT
one innovation from
F one
PRODUCT
is also helping hybrids reduce their carpet footprint that's curse or the kinetic energy recovery system in common parliaments is known as regenerative breaking And works by storing energy of the car to celebrate in a battery for later use. That's not enough. You recovery system looking to harness the heat produce from breaking and the engine exhaust that could allow cars to generate the same power using
30%
PERCENT
less fuel. Climate change. We make it very transparent to the shopper before they accept an order. What's the order is gonna look like? How much we're gonna pay them and how much like the consumer is paying them? And so they can decide whether they take an order or is also used yet. And that's the kind of flexibility we don't talk is
Value
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is a kind of transparency that they want. Are you seeing a labor shortage right now and what are you doing to to combat that? It's different in different places. All demographic We have
70%
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Humor
PERSON
and we are seeing that being very appealing to women. Watch
Bloomberg
PERSON
surveillance early edition for the news you need when you need it. Twice as much as possible Can it sustain? Is facing a very different reality. Be ahead of the game. Hey Facebook Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Inflation is a terrible thing. Inflation you could tower.
Info
PERSON
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in an average.
Innovations in the name of speed are helping in the everyday fight against climate change. We make it very transparent to the shopper before they accept an order. What's the order is gonna look like? How much we're gonna pay them and how much like the consumer is paying them? And so they can decide whether they take an order or was also refuse it. And that's the kind of flexibility we don't talk is really
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is a kind of transparency that they want. Are you seeing a labor shortage right now and what are you doing to to combat that? It's different in different places. All demographic of shoppers is completely different from food delivery and write sharing. We have
70%
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half
CARDINAL
of them are moms. And that's because a The job on
Instagram
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is very different and just being in the car with strangers. It's about like going to the store, doing a good job of customer service of really picking the right products for the consumer and we are seeing that being very appealing to women. Watch
Bloomberg
PERSON
surveillance early edition for the news you need when you need it. In
New York
GPE
and
Anna Edwards
PERSON
in
London
GPE
.
Australia Central Bank
ORG
. Surveillance Can it sustain? It's normal at a time when everybody else is facing a very different reality. Be ahead of the game. Welcome to
Debbie Australia
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Hey Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Inflation is a terrible thing inflation you could tower. Can you think about bitcoin I don't think it's a currency I think it's a commodity
today
DATE
we're in and everything
Bob
PERSON
I'm
Francy Laqua
PERSON
welcome to
Bloomberg Front Roll
ORG
and there will tell is a titan of
European
NORP
banking at
UBS
ORG
he transformed the firm's investment bank he's now the chief executive of major
Italian
NORP
lender only credit over the course of his career or child has had to navigate numerous crisis and now is
Different
ORG
. The most serious conflict in
Europe
LOC
since
World War
EVENT
two
CARDINAL
rampant inflation and aggressive central bank tightening. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising custody of energy. The
Italian
NORP
has also faced personal challenges recently including a dramatic and public legal battle with
Santander
PERSON
over their butt to tent to hire him as chief executive. I will always be sorry for how it went this is another bank I admire a lot and that hasn't changed I think for me it was more about Confirming the facts. It was obviously an emotional roller coaster. From a family standpoint it was great impactful. TV interview since becoming chief executive. We talk about his new role at Unaccredit. The impact of the war in
Ukraine
GPE
. The challenges of being
Europe
LOC
's bank and that sent under a debacle. Here's my conversation with
Andrea Alche
PERSON
. Thank you so much for speaking to
Bloomberg
PERSON
. So, you've been in the job
just over a year
DATE
. Was it everything you hope for? More. Really? Much more. Yes. Not stressful. Stressful but I like stressful I think that what has been great
this year
DATE
is a way you can credit Really welcome me into the organization. It was full of passion, full of warmth, and you feel
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70%
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Service
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of really picking the right products for the consumer and we are seeing that being very appealing to women. Watch
Bloomberg
PERSON
surveillance earlier edition for the news you need when you need it. Twice as much as Can it sustain? Everybody else is facing a very different reality.
Blueberries
ORG
. Over technology. Access the financial world on demand. Here from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Inflation is a terrible thing. Inflation you could tower. Fall. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in an everything boat. I'm
Francy Laqua
PERSON
welcome to
Bloomberg Front Roll
ORG
and there are
Chen
PERSON
is a titan of
European
NORP
banking a
UBS
ORG
he transformed the firm's investment bank he's now achieved executive of major
Italian
NORP
lender only credit over the course of his career or child has had to navigate numerous crisis and now is no Rampant inflation and aggressive central bank tightening. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising cost of energy. The
Italian
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has also faced personal challenges recently including a dramatic and public legal battle with
Santander
PERSON
over the robot to tempt to hire him as chief executive. I will always be sorry for how it went That hasn't changed I think for me More about The facts. It was obviously an emotional roller coaster. From a family standpoint it was quite impactful. TV interviews since becoming chief executive. We talk about his new role at
Una
ORG
credit. The impact of the war in
Ukraine
GPE
. The challenges of being
Europe
LOC
's bank and that sent under a debacle. Here's my conversation with
Andre Elche
ORG
.
Andre Orchelle
PERSON
thank you so much for speaking to
Bloomberg
PERSON
so you've been in the job just over a year was it everything you hope for? More. Really? Much more. Yes. Not stressful. Stressful but I like stressful I think that what has been great
this year
DATE
is a way you create it Really welcome near me into the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision, a new strategy, a new direction, At ready to commit and own the future. It was absolutely outstanding. Did that surprise you or you expecting more sleepy bank? No but I looked at it more from the perspective of a banker numbers when needs to be done or is the value where it's not the value But when you arrive, you see the people and that makes the whole difference. So that's what what makes it more emotional, I guess. Is this a like? Once what what keeps you up?
We have
70%
PERCENT
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Bloomberg
PERSON
surveillance early edition for the news you need when you need it. In
New York
GPE
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Anna Edwards
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London
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.
Australia Central Bank
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PERSON
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Jonathan Pharoah YPA
PERSON
front and center. Can it sustain? It's normal at a time when everybody else is facing a very different reality. Be ahead of the game. Hey Facebook Yes. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Inflation is a terrible thing inflation you could tower.
Info
PERSON
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in an everything boat. I'm
Francy Laqua
PERSON
welcome to
Bloomberg Front Roll
ORG
and there will is a titan of
European
NORP
banking at
UBS
ORG
he transformed the firm's investment bank he's now the chief executive of major
Italian
NORP
lender only credit over the course of his career or child has had to navigate numerous crisis and now is no different Rampant inflation and aggressive central bank tightening. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising cost of energy The
Italian
NORP
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Santander
PERSON
over their butt to tent to hire him as chief executive. I will always be sorry for how it went this is another bank I admire a lot and that hasn't changed I think for me it was more about Confirming the facts. It was obviously an emotional roller coaster. From a family standpoint it was great impactful. TV interview since becoming chief executive. We talk about his new role at
Una
ORG
credit. The impact of the war in
Ukraine
GPE
. The challenges of being
Europe
LOC
's bank and that sent under a debacle. Here's my conversation with
Andrea Alche
PERSON
.
Andre Orchelle
PERSON
thank you so much for speaking to
Bloomberg
PERSON
so you've been in the job just over a year was it everything you hope for more? Really? Much more. Yes. Not stressful. Stressful but I like stressful I think that what has been great
this year
DATE
is a way you can credit Really welcome me into the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision, a new strategy, a new direction, and that ready to commit an on the future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleepy bank? No but I looked at it more from the perspective of a banker numbers To be done or is the value or it's not the value But when you arrive, you see the people and that makes the whole difference. So, that's what what makes it more emotional, I guess, is this like. What keeps you up at
night
TIME
? The emotions are now very engaged and you feel a duty and a commitment to the people who are looking up at you to To
Inflation is a terrible thing. Inflation you could tower.
Rainfall
GPE
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Today
DATE
, we're in and everything
Bob
PERSON
. I'm Francy Laquat welcome to Bloomberg Front Row and there are
Chell
ORG
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UBS
ORG
he transformed the firm's investment bank he's now the chief executive of major
Italian
NORP
lender unicredit His career or
Chel
PERSON
has had to navigate numerous crisis and now is no different as the world grapples with the most serious conflict in
Europe
LOC
since
World War
EVENT
two
CARDINAL
rampant inflation and aggressive central bank tightening. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising cost of energy. The
Italian
NORP
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Santander
PERSON
over the robot to
Kent
ORG
to hire him as chief executive. I will always be sorry for how it went. This is another bank I admire a lot and that hasn't changed I think for me More about The facts. It was obviously an emotional roller coaster. From a family standpoint it was quite impactful. TV interviews since becoming chief executive. We talk about his new role at Unaccredit. The impact of the war in
Ukraine
GPE
. The challenges of being
Europe
LOC
's bank and that sent under debacle. Here's my conversation with
Andre Alche
PERSON
.
Andre Orchelle
PERSON
thank you so much for speaking to
Bloomberg
PERSON
so you've been in the job just over a year was it everything you hoped for more? Really? Much more yes. Not stressful. Stressful but I like stressful I think that what has been great
this year
DATE
is a way you create it Really welcome to me in
two
CARDINAL
of the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision and new strategy, a new direction, At the ready to commit and own the future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleepy bank? No but I looked at it more from the perspective of a banker numbers What needs to be done or is the value where it's not the value But when you arrive, you see the people and that makes the whole difference. So, that's what what makes it more emotional, I guess, is this like What keeps you up at
night
TIME
? Well, the emotions are now very engaged And you feel a duty and a commitment to the people who are looking up at you to To take my ministers and direction And that I think puts a lot of weight on your shoulders.
Russia
GPE
is
one
CARDINAL
of the top
three
CARDINAL
in
Europe
LOC
how do you deal with the employees in
Russia
GPE
with your subdride in
Russia
GPE
Well,
first
ORDINAL
of all, frost, it's important to understand that We have to remember that
95%
PERCENT
of the bank is not in
Russia
GPE
. No And we cannot commit the mistake of spending the entire time on
Russia
GPE
where our emotion and the shock that we have taken Is probably driving us to do. So what we have done is we have a situation room that is fully committed to do that. We've all been skill sets but we need from legal to tax to accounting to everything else. And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation. When I look at
Russia
GPE
separating it there are
two
CARDINAL
orders of effects that we look at. One is a Shot. Exposure to
Russia
GPE
I think that in
the last 2 months
DATE
We have a chip to reduce its meaningfully by
about two 1 billion
MONEY
we've done that actually the team has done a great job without that costing the bank almost anything which was not to be expected And at the same time we have understood very well and in a granular way what the risks are And we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite
Really welcome to me into the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision, a new strategy, a new direction, and that ready to commit an on the future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleepy bank? No but I looked at it more from the perspective of a banker numbers To be done or is the value or it's not the value But when you arrive, you see the people and that makes the whole difference. So, that's what makes it more emotional, I guess, is this like What keeps you up at
night
TIME
? The emotions are now very engaged and you feel a duty and a commitment to the people who are looking up at you to To take
5 minutes
TIME
searching direction That I think puts a lot of weight on your shoulders. Are you a credit exposure to
Russia
GPE
is
one
CARDINAL
of the top
three
CARDINAL
in
Europe
LOC
? How do you deal with the employees in
Russia
GPE
with your subsidry in
Russia
GPE
? Well,
first
ORDINAL
of all, for us, it's important to understand that we we have to remember that
95%
PERCENT
of the bank Is not in
Russia
GPE
. No And we cannot commit the mistake of spending the entire time on
Russia
GPE
where our emotion and the shock that we have taken He's probably driving us to do. So what we have done is we have a situation room that is fully committed to do that. We've all the skill sets that we need from legal to tax to accounting to everything else. And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation. When I look at
Russia
GPE
, separating it, there are
two
CARDINAL
orders of effects that we look at
One
CARDINAL
is a direct shot Our exposure to
Russia
GPE
I think that in
the last 2 months
DATE
We have a chip to reduce it meaningfully by
about two 1 billion
MONEY
. We've done that actually. The team has done a great job without that costing the bank almost anything which was not to be expected. And at the same time we have understood very well and in a granular way what the risks are and we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite large and the market
Cook
PERSON
it quite well. Is that how you would describe it I think so I think we what we did is during those 2 months we were able to articulate In a detailed way what is our extreme loss scenario for
Russia
GPE
Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact. You do with this units are you frustrated that you kept you keep on getting asked Over and over what will happen to to
Russia
GPE
and the employees there? Well I think that anyone who has a large presence in
Russia
GPE
or significant presence in large in in
Russia
GPE
's being asked is normal. I think we believe strongly that Let us show you what we execute and let's talk about it then At this point in time while we have reviewed the situation we have a number of options on that we could pursue
Options
ORG
are very much affected by the next wave of sanction Who have a counterparts, what we can do, what we cannot do, and at the same time we should not forget that we do have 4000 employees in
Russia
GPE
. We do have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
actually
Europeans
NORP
were trying to go through the same thing that we're Through as a bank which is deal with a situation the best way possible. Do you have a preferred route? And actually, is there a situation where you just say, we need to get rid of it. What do you say to the critics? Let's say,
Andre
PERSON
, you should have gotten rid of this Whatever the cost. I think I'll review is Number
one
CARDINAL
my preferred route is not necessarily root but can I can be executed in the same way that we have given detail of how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for me.
When you arrive, you see the people and that makes the whole difference. Makes it more emotional, I guess. Is this like? Once what what keeps you up at
night
TIME
? Well, the emotions are now very engaged And you feel a duty and a commitment to the people who are looking up at you to To take
5 minutes
TIME
certain direction That I think puts a lot of weight on your shoulders.
Russia
GPE
. Well,
first
ORDINAL
of all, for us, it's important to understand that we we have to remember that
95%
PERCENT
of the bank is not in
Russia
GPE
. No. And we cannot commit the mistake of spending Entire time on
Russia
GPE
where our emotion and the shock that we have taken
East
LOC
probably driving us to do So what we have done is we have a situation room that is fully committed to do that We've all the skill sets that we need from legal to tax to accounting to everything else. And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation. When I look at
Russia
GPE
, separating it, there are
two
CARDINAL
orders of effects that we look at. One is a Shot. Our exposure to
Russia
GPE
I think that in
the last 2 months
DATE
We have a chip to reduce it meaningfully by
about two 1 billion
MONEY
. We've done that actually the team has done a great job without that costing the bank almost anything which was not to be expected. At the same time we have understood very well and in a granular way what the risks are and we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite large and the Took it quite well is that how you would describe it I think so. I think we, what we did is during
those 2 months
DATE
, we were able to articulate In a detailed way what is our extreme loss scenario for
Russia
GPE
? Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact the question is now what you do with this unit are you frustrated that you kept you keep on getting asked Over and over. What will happen to to
Russia
GPE
Indian
NORP
police there? Well, I think that anyone who has a large presence in
Russia
GPE
or significant presence in large in in
Russia
GPE
is being asked this normal I think we believe strongly that Let us show you what we execute and let's talk about it then This point in time while we have reviewed the situation we have a number of options on that we could pursue The options are very much affected by the next wave of sanction Who have a counterparts what we can do what we cannot do and at the same time we should not forget that we do have 4000 employees in
Russia
GPE
we do have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
are actually
Europeans
NORP
who are trying to go through the same thing that we're Through as a bank which is deal with a situation the best way possible. Do you have a preferred route? And actually, is there a situation where you just say, we need to get rid of it. What do you say to the critics? Let's say,
Andrea
PERSON
, you should have gotten rid of this. The cost. I think I review is One my preferred route is not necessarily root but can I can be executed in the same way that we have given detail of how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for successive ways of sanctions but have closed the window on who we can deal with what transaction can we do In which timing. The same applies to our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions that we have And buy who are our counterparts. We believe very strongly that Want to be consistent with what VU has decided. We need to consider all the options in a way that they reflect fair value because this is
Well the emotions are now very engaged and you feel a duty and a commitment to the people who are looking up at you to To take
5 minutes
TIME
certain direction That I think puts a lot of weight on your shoulders.
Russia
GPE
is
one
CARDINAL
of the top
three
CARDINAL
in
Europe
LOC
how do you deal with the employees in
Russia
GPE
with your subsidiary in
Russia
GPE
? Well
first
ORDINAL
of all for us it's important to understand that we we have to remember that
95%
PERCENT
of the bank is not in
Russia
GPE
. No. And we cannot commit the mistake of spending In tar time on
Russia
GPE
where our emotion and the shock that we have taken He's probably driving us to do So what we have done is we have a situation room that is fully committed to do that We've all the skill sets that we need from legal to tax to accounting to everything else. And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation. When I look at
Russia
GPE
, separating it, there are
two
CARDINAL
orders of effects that we look at. One is Sure. Our exposure to
Russia
GPE
I think that in
the last 2 months
DATE
We have a chip to reduce it meaningfully by
about two 1 billion
MONEY
That actually the team has done a great job without that costing the bank almost anything which was not to be expected At the same time we have understood very well and in a granular way what the risks are and we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite large and the market It quite well is that how you would describe it I think so I think we what we did is during those 2 months we were able to articulate In a detailed way what is our extreme loss scenario for
Russia
GPE
? Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact. Do with this units are you frustrated that you kept you keep on getting asked Over what will happen to to
Russia
GPE
Indian
NORP
police there well I think that anyone who has a large presence in
Russia
GPE
or significant presence in large in in
Russia
GPE
's being asked it's normal I think we believe strongly that Let us show you what we execute and let's talk about it then The best point in time while we have reviewed the situation we have a number of options on that we could pursue The options are very much affected by the next wave of sanction Who have a counterparts what we can do what we cannot do and at the same time we should not forget that we do have 4000 employees in
Russia
GPE
we do have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
are actually
Europeans
NORP
who are trying to go through the same thing that we're Through as a bank which is deal with a situation the best way possible. Do you have a preferred route? And actually, is there a situation where you just say, we need to get rid of it. What do you say to the critics? Let's say,
Andre
PERSON
, you should have gotten rid of this. Whatever the cost. I think I review is One my preferred route is not necessarily root but can I can be executed in the same way that we have given detail of how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for successive ways of sanctions but have closed the window on who we can deal with what transaction can we do and in which timing
Vaseem
ORG
applies to our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions but we have And buy who are our counterparts. We believe very strongly that Want to be consistent with what VU has decided. We need to consider all the options in a way that they reflect fair value because this is a primary objective for Providing. Right. Too much value to accounter part. Let's put it this way. But he's not justified and at the same thing.
Set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite large and the market took it quite well. Is that how you would describe it? I think so I think we what we did is during those 2 months we were able to articulate In a detailed way what is our extreme loss scenario for
Russia
GPE
Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact. You do with this unit are you frustrated that you kept you keep on getting asked Over and over. What will happen to to
Russia
GPE
and the employees there? Well, I think that anyone who has a large presence in
Russia
GPE
or significant presence enlarge in in
Russia
GPE
's being asked is normal I think we believe strongly that Let us show you what we execute and let's talk about it then Because at this point in time while we have reviewed the situation we have a number of options on that we could pursue The options are very much affected by the next wave of sanction Who have a counterparts, what we can do, what we cannot do, and at the same time we should not forget that we do have 4000 employees in
Russia
GPE
. We do have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
actually
Europeans
NORP
were trying to go through the same thing that we're going Through as a bank which is deal with a situation the best way possible. Do you have a preferred route? And actually, is there a situation where you just say, we need to get rid of it. What do you say to the critics? Let's say,
Andre
PERSON
, you should have gotten rid of this. The cost. I think I'll review is Number
one
CARDINAL
my preferred route is not necessarily root but can I can be executed in the same way that we have given detail of how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for successive ways of sanctions but have closed the window on who we can deal with What transaction can we do and in which time
Vaseem
ORG
applies to our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions that we have And by who are our counterparts. We believe very strongly that We want to be consistent with what VU has decided. We need to consider all the options in a way that they reflect fair value because this is a primary objective Not Right too much value to the counterpart let's put it this way but he's not justified and at the same time balancing what is leading the best interest of our stakeholder and investors I'm worried are you about inflation about the cost of living you're so tied to the
Italian
NORP
economy and this is an economy in terms of In terms of also exports and imports with
Russia
GPE
that's that's one of the most closely linked We are tied to the
Italian
NORP
economy Than people expect because we are
about 40%
PERCENT
of the bank I think in
my first year
DATE
of operation being tied to
Italian
NORP
economy has been great Good gross good dynamics stable direction of travel. Is that the driving effect? Hey
Dees
ORG
would you like a fact as we look forward We have
two
CARDINAL
central scenarios for ourselves
one
CARDINAL
is a
Slow
ORG
down. And the other one is a depression. At the moment, we see a significant slow down as the central scenario although Has not been affected at all. Beyond prices. So what we're seeing is inflation being the precursor of more. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising cost of energy. We also see But for companies that had investments or that were dependent on energy or on grain to a certain extent the whole value change has been completely alright Destroyed and so they need to reassess what is their position Redesign their models
If we want to be consistent with what VU has decided We need to consider all the options in a way that they reflect fair value because this is a primary objective for Providing. Right. Too much value to accounter part. Let's put it this way. But he's not justified and at the same time balancing what he's been the best interest of our stakeholder and investors. I'm worried about you about inflation about the cost of living. You're so tired to the
Italian
NORP
economy. And this is an economy in terms of energy, in terms of also exports and imports with That's that's one of the most closely linked Well, we are tied to the
Italian
NORP
economy. We're less than people expect because we are
about 40%
PERCENT
of the bank I think in
my first year
DATE
of operation being tied to the
Italian
NORP
economy has been great Good girls good dynamics stable direction of travel. Is that the driving effect? Hey
Desmond
PERSON
drag effect as we look forward We have
two
CARDINAL
central scenarios for our south one is a
Slow
ORG
down. And the other one is a depression. At the moment, we see a significant slow down as the central scenario although Has not been affected at all basically over effects beyond prices. So what we're seeing is inflation being the precursor of more. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising cost of in other energy. We also see But for companies that had investments or that were dependent on energy or on grain to assert an extent the whole value change has been completely Destroyed and so they need to reassess what is their position Change for sources Redesign their models But at this point in time this translate In a slowdown I've investment we haven't seen anything else we do believe that going forward it will be a lot more disruptive. Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure for something Universally important to human life as sleep mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our It's easy to memorize things that makes you smart if you can spit it back a lot of facts but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what you bring figures out while you're sleeping. Do you see that coming
Taiwan
GPE
and
China
GPE
. To come from. We will not just cut and draw.
24 hours
TIME
a day.
Bloomberg
PERSON
. Do you worry about a policy mistake from the ECB if if you have this possible recession or environment and they don't raise rates what happens to inflation and what happens to all of your
Italian
NORP
clients or
European
NORP
clients Well it's a very tricky economic environment for ECB but also in the
US
GPE
On the one hand you have inflation but the inflation is generated by your specific segment of the economy A energy I'm not that sure but raising rates a lot will cool that down because it's very concentrated and it is linked to a dislocation between a friend demand. The rest of the economy however.
We need to reassess what is their position Change for sources Redesigned their models But at this point in time this translate solely in a slowdown I've investment we haven't seen anything else we do believe that going forward it will be a lot more disruptive. Hey
Important
PRODUCT
. I think we've moved from this attitude from it's an indulgence, a waste of time, almost an illness that needs a cure. For something as universally important to human life
Mystery
LOC
surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes that a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understanding It's easy to memorize things that makes you smart. It can spit back a lot of back. But if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what you bring figures out while you're sleeping. Do you see that coming through
24 hours
TIME
a day.
Bloomberg
PERSON
. Do you worry about a policy mistake from the ECB if if you have this possible recession or environment They don't raise rates. What happens to inflation and what happens to all of your
Italian
NORP
clients or
European
NORP
clients? Oh it's a very tricky economic environment for ECB but also in the
US
GPE
. Yeah. Because on the one hand you have inflation between flesh and is generated by a specific segment of the economy. A energy I'm not that sure that raising rates a lot will cool that down because it's very concentrated and it is linked to a dislocation between a friend demand The rest of the economy however We all agree that he's slowing down and maybe tilting into recession raising rates Create an issue. So, it's very, very tricky to manage and yes, we're all concerned to finding the right balance. I think that getting to more neutral stance towards the oh is probably The moment you go up a lot from there it depends very much on what the rest of the economy is doing. We also have this widening spread between
Italian
NORP
bit of peace and
german
NORP
buttons. How much of a warrior is that? Well, you always have a bit of that every time that there is a crisis there is a so-called flight to quality
Happens
PERSON
i think that like for many other things we need to see how all the economies of
Europe
LOC
are gonna perform in fact Peace environment Think what I was telling investors we have a day is if you look at
Today
DATE
. No. And we are
5 months
DATE
into
the year
DATE
. You do not see any deceleration of the economy You seem flation, you see a rising rates, you see some very worrying sign, you anticipate a social and an economy impact from the war, but you're not seeing yet. That kind of degeneration that the market is expecting. What is the market looking at? I mean, this is like the market seems to be all over the place. We could be up. We could be down. Are we living for a correction? Well, I think I I read Any interesting report from one of the organization that covers us but we'll remain on named here but but was asked to do a parallel between environment of
today
DATE
and the 70s on inflation Which tells you what kind of mood and and worry exist out there. Personally I don't think it's gonna be that extreme because I think there are a number of amortizers I mean if you look
Raising reach a lot we'll call that down because it's very concentrated and it is linked to a dislocation between a friendly man The rest of the economy however We all agree that he's slowing down and maybe tilting into recession raising rates Neutral stance towards V oh is probably okay the moment you go up a lot from there it depends very much on what the rest of the economy is doing alright we also have this widening spread between How much of a warrior is that? Well, you always have a bit of that every time that there is a crisis that is so called flight to quality. Happens. That like for many other things we need to see how all the economies of
Europe
LOC
are gonna perform in fact During this this environment What I was telling investors we have a day is if you look at
Today
DATE
. And we are
5 months
DATE
into the year You do not see any deceleration of the economy. You seem flation, you see a rising rates, you see some very wherein sign, you anticipate a social and an economy impact from the war, but you're not seeing yet. That kind of degeneration that the market is expecting. Looking at. I mean, this is like the market seems to be all over the place. We could be up, we could be down, or we living through a correction. Well, I think I I read an interesting report from one of the That covers us but we'll remain on named here but but was asked to do a parallel between the environment of today and the 70s on inflation Which tells you what kind of mood Worry exist out there Personally I don't think it's gonna be that extreme because I think there are a number of amortizers I mean if you look at the facts
Italy
GPE
has managed to Tribute or re Change the average in of its energy to a significant extent of its value change so we now go to John and other places to get a lot of a gas or we will be going if you look at
Poland
GPE
they have found a way to deal with
Norway
GPE
if you look at
Bulgaria
GPE
they connected their pipes towards
Greece
GPE
and the guests that are rushed from there so
Europe
LOC
is adjusting The question is how much time there is but
Europe
LOC
is adjusting. Kind of earthquake way because you could see if there's oil and gas and bargo from
Russia
GPE
what happens to this continent I think it depends on timing. This is that's why the The economic environment that we're looking at it depends on timing and extend of the Breakage away from
Russia
GPE
and to a certain extent from
Ukraine
GPE
If that is done very fast and completely As you said the impact will be quite dramatic Over a Longer period of time the impact will be less dramatic do we have? A significant alarm period of time. I don't know. But that is the key. And we always talk about gas but we also need to understand our dependence on our commodities.
Palagiam Lithium
PERSON
a whole of other things that the entire value chain was predicated on connections with
Russia
GPE
and
Green
PERSON
's connections with
Ukraine
GPE
That changes from
1 day
DATE
to the other the shock is very high. You were talking about a political stability in
Italy
GPE
. We were joking about the drug effect. Do you worry? Is that actually politics and it so he has always been quite messy that this political instability comes back and hurts your bank? Well politics in
Italy
GPE
if you're
Italian
NORP
and
Italian
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or politics in
Italy
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but
Italians
NORP
have been able to go through it And Have a lot of trust in the country and and I believe the country has In a certain way And in a way I am much more nervous about the more general impact on economy in
Europe
LOC
the more general social impact on the on
Europe
LOC
immigration
And and worry exist out there Personally I don't think it's gonna be that extreme because I think there are a number of amortizers I mean if you look at the facts
Italy
GPE
has managed to Tribute or re or change the average in of its energy to a significant To get a lot of gas or we will be going if you look at
Poland
GPE
they have found a way to deal with
Norway
GPE
if you look at
Bulgaria
GPE
they connected their pipes towards
Greece
GPE
and the guest that arrives from there. So,
Europe
LOC
is adjusting The question is how much time there is but
Europe
LOC
is adjusting. Kind of earthquake way because you could see if there's oil and gas and bargo from
Russia
GPE
what happens to this continent I think it depends on timing.
VC
PERSON
's that's why the The economic environment that we're looking at it depends on timing and extend of the Breakage away from
Russia
GPE
and to a certain extent from
Ukraine
GPE
If that is done very fast and completely As you said the impact will be quite dramatic if that is done over a If you can longer period of time the impact will be less dramatic do we have a significant long ago period of time I don't know but that is the key And we always talk about gas but we also need to understand our dependence on our commodities
Palagian
NORP
lithium a whole of everything that the entire value chain was predicated on connections with
Russia
GPE
and
Greens Connections
ORG
with
Ukraine
GPE
That changes from
1 day
DATE
to hour the shock is very high You were talking about a political stability in
Italy
GPE
. We were joking about the drug effect. Do you worry? Is that actually politics and
Italy
GPE
has always been quite messy that this political instability comes back and hurts your bank? Well politics in
Italy
GPE
if you're
Italian
NORP
and
Italian
NORP
or politics in
Italy
GPE
but
Italians
NORP
have been able to go through it I have a lot of trust in the country and and I believe the country has In a certain way And in a way I am much more nervous about the more general impact on economy in
Europe
LOC
the more general social impact on the on
Europe
LOC
immigration things like that that are going to Not only but the broader continent. How much do you like taking care of risk? So I wanna talk about a little bit about what you're doing inside unicred. Do you feel like you're a risk manager? Is it about also cutting costs? So how do you you have one of the most generous plans actually for investors out there. How will you stick to it? Well I think
Stick
FAC
to it I think We have said very clearly that we felt that the execution of uni training unlocked would yield to a certain level of profitability A certain level organic capital generation based on that we could have very generous. Yes. Distribution to our shuffled. Was that free
Russia
GPE
? That was pre-rush. So Anticipated that our capital will remain stable through a period at the top end of our peer group and that we would distribute only the excess capital we would generate
every year
DATE
. So, in in that way, it is prudent. It is boardinated to us executing the plan and all of his slavers at the same time because of where we're coming from There is a lot of value to be created. So, that is what generates the distribution that we have. Then we get to the invasion of
Ukraine
GPE
At the moment what we have done is we have changed our macro scenario reference from what it was before to slow down. From GDP standpoint it brings
about two to two and a half
CARDINAL
points lesser GDP gross than we were anticipating from an inflation standpoint it takes to a couple of percentage point more inflation than we were anticipating with peaks in certain countries obviously In that environment Still execute let's say the uni credit unlock plant as it is.
I am much more nervous about the more general impact on economy in
Europe
LOC
the more general social impact on the account on
Europe
LOC
immigration things like that that are going to touch not only
Italy
GPE
but the broader continent. How much do you like taking care of risk? So I wanna talk about a little bit about what you're doing inside unicredit Do you feel like you're a risk manager? Is it about also cutting costs? So, how do you, you have one of the most generous plans actually for investors out there? How will you stick to it? Well I think
Always
PERSON
stick to it I think We have said very clearly that we felt that the execution of unicorn unlocked would yield to a certain level of profitability A certain level organic capital generation based on that we could have very generous. Yes. Distribution to our shuffled. Was that free
Russia
GPE
? That was pre-rush. So Anticipated that our capital will remain stable through a period at the top end of our peer group and that we would distribute only the access capital we would generate
every year
DATE
. So, in in that way, it is prudent. It is coordinated to us executing the plan and all of his slavers at the same time because of where we're coming from There is a lot of value to be created. So, that is what generates the distribution that we have. Then we get to be invasion of
Ukraine
GPE
At the moment what we have done is we have changed our macro scenario reference from what it was before GDP standpoint it brings
about two to two and a half
CARDINAL
points lesser
GDB
ORG
gross when we were anticipating from an inflation standpoint it takes to a couple of percentage point more inflation than we were anticipating we've peaks in certain countries obviously In that environment Still execute let's say the unicorn lock plant as it is if we keep our eyes on the ball and execute as we should be because on a way the GDPD celebration is in part compensated by higher rates which are good for banks like Podcast. A lot of the satellites have propulsion systems that you gotta move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collisionable unit service. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in If you're satellite's gonna come dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem Now the risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this whizzing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up Had one of the most colorful careers. I don't know if that's the right way to describe it. I don't know how you would describe it. It's
only 5 years
DATE
. It's not been dull or boring following your career moves. Do you feel vindicated? That you were awarded that amount of money? With what happened with
Santa
GPE
there? I think the I will always be sorry for how it went this is another bank I'd know a lot and that hasn't changed I think for me it was more about Firming effects The truth about a new existed
With pics in certain countries obviously In that environment And still execute let's say the unicorn lock plant as it is if we keep our eyes on the ball and execute as we should be because on a way the GDPD celebration is in part compensated by higher rates which are good for banks like Like us. A lot of the satellites have proposal systems that you gotta move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in If your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up Had one of the most colorful careers. I don't know if that's the right way to describe it. I don't know how you would describe it. It's only in
the 5 years
DATE
. It's not been dollar boring following your career moves do you feel vindicated? That you were awarded that amount of money with what happened with
Santa
GPE
there? I think the I will always be sorry for how it went this is another bank I'd know a lot and that hasn't changed I think for me it was more about Firming effects But true spot a new existed And that has been done and it's not controversial. I mean, you will find it. Black or white. The process that has happened. For me was very important because a number of stories were were written at the time. What happens then I mean obviously
Santa
GPE
has appealed we'll see but for me the important point was that The truth is very facts are there Please mentally I have moved on. You know
Eight 1 million
CARDINAL
Never starting a job but also to try and understand what labor laws and everything like that works. Do you think it's changed? Way we look up banking walls and I don't know if it has changed what I know is that we shouldn't forget that Banking is a highly regulated industry as a as a result of that Jobs have a very large component of deferral in their compensation I invite you
Kate
PERSON
7 years
DATE
And
more than 50%
PERCENT
if not
16
CARDINAL
certain cases of your compensation is deferred over
7 years
DATE
If you do the math that means that at every point in time you're gonna have
between Four X
CARDINAL
of your compensation. Index to the share price of the bank where you are and if it goes up
Four
CARDINAL
x. Yeah. Becomes even more.
Verdict
PERSON
is when you change organizations. What do you do You either have
the New Organization
ORG
that That Deferral You don't move. In effect that deferral is your entire savings So I do think that although these are large numbers we need to be put in
I think for me More about The facts The truth about a new existed And that has been done and it's on controversial I mean you will find it black or white Through the process that has happened That for me was very important because a number of stories were were written at the time. What happens then I mean obviously
Santa
GPE
has appealed we'll see But for me the important point was that The truth is very facts are there and at least mentally I have moved on. University without never starting a job but also to try and understand what labor laws and everything like that works. Do you think it's changed? The way we look at banking walls and Don't know if it has changed what I know is that we shouldn't forget that Banking is a highly regulated industry as a as a result of that senior jobs have a very large component of deferral in their compensation. Invite your kids
7 years
DATE
And
more than 50%
PERCENT
if not
16
CARDINAL
certain cases of your compensation is deferred over
7 years
DATE
. If you do the math that means that at every point in time you're gonna have
between Four X
CARDINAL
of your compensation And they just index to the share price of the bank where you are and if it goes up Becomes even more.
Verdict
PERSON
is when you change organizations. What do you do You either have the new organization that That Deferral Don't move. In effect that deferral is your entire savings. So, I do think that although these are large numbers, we need to be put in context of how they got there Usually in most cases in all cases
Organization
ORG
who has Assumes that liability deferred. So, that number is liability and deferral. Is plus a few other things that occurred because of a case but that is what it is. It was an emotional roller coaster. Is it something that you've put behind or is it something that you don't think about? Well, at the beginning, it was obviously an emotional roller coaster From a family standpoint it was quite impactful and I think Personally given the estimate for that bank it was quite impactful I think the the important point was I Once I went through the preparation of the case I detached and I left other people deal with it and it was quite fortunate that those people were excellent And then I trusted the process a lot of people told me not to trust the process but I did Any thundered up being. Me a little bit about your working from home policy. So do you think COVID has changed everything? Is it problematic for a bank to let people work from home? Let's say that what COVID has done both from the standpoint of clients and for standpoint of employees is More remote. Gile. Flexible. I think I think that is not a bad thing. I think it has taken away FaceTime To a certain extent I believe strongly that being at work is important. That's how you establish the culture. How you train people How teams can interact with each other and brainstorm and come up with a good idea. On the other hand and we had started to do something similar at
UBS
ORG
at the time You need to give people the flexibility to organize their lives and you cannot say it's Five or it's whatever it is and that is it. If you allow that flexibility for people to organize their lives and if they need to take a
Friday
DATE
morning And then see the soccer match of their children And then On the Friday
evening
TIME
That's their their choice but I don't think you can replace human interaction brainstorming teamwork you know if you look at the agile way of developing our new our new initiatives are on
You don't move In effect that deferral is your entire savings. I do think that although these are large numbers they need to be put in context of how they got there. Usually in most cases in all cases
Organization
ORG
who has Assumes but liability deferral. So, that number is that liability and deferral. Is plus if you ever think that occurred because of a case but that is what it is. It was an emotional roller coaster. Is it something that you've put behind or is something that you don't think about? Well, at the beginning, it was obviously an emotional
Roster
ORG
. I think from a family standpoint it was quite impactful and I think personally given the estimate for that bank it was quite impactful I think the the important point was I Once I went through the preparation of the case I detached and left other people deal with it and it was quite fortunate that those people were excellent And then I trusted the process a lot of people told me not to trust the process but I did Any tended up being taught me a little bit about your working from home policy so do you think COVID has changed everything is it problematic for a bank to let people work from home? Let's say that what COVID has done both from a standpoint of clients and public standpoint of employees is More remote. Job. Flexible. I think that is not a bad thing I think it has taken away FaceTime To a certain extent I believe strongly that being at work is important That's how you establish the culture. You train people How teams can interact with each other and brainstorm and come up with a good idea. On the other hand and we had started to do something similar at
UBS
ORG
at the time you need to give people the flexibility to organize their lives and you cannot say it's
nine to five
CARDINAL
or it's whatever it is and that is it So if you allow that flexibility for people to organize their lives and if they need to take a
Friday
DATE
morning And then see the soccer match of their children And then work longer on the
Friday
DATE
evening
TIME
. That's their their choice but I don't think you can replace human interaction brainstorming teamwork you know if you look at the agile way of developing our new our new initiatives around IT From representative from business, technology, compliance risk, all being in
one
CARDINAL
room, and instead of saying you do pieces, how do we resolve the mortgage product? You can do that in the office you can do that remote talk to me about attracting talent so do you do you worry about you know some of the bright young minds going to JP
Morgan Golman Sax
ORG
because they pay more would you worry about them going to crypto or Google because it's exciting Well I think what I have found is that Are as attracted by money as they are and probably more by
Version
PERSON
what's for challenge what do I learn Is this company doing things that I am proud of Care for the environment. Do we care for the communities? Will I be followed in my career and developed which is why we just launched the University These things especially in
the early years
DATE
Quite a lot of space in their decision As they move through And they come in and they move through when what thick spaces how do you treat them how do you track their career manage their career do you give them opportunity that's why I think we're very fortunate I can have A young person from
Bosnia
GPE
who start in the leading back in
Bosnia
GPE
does a tour into
Austria
GPE
,
Italy
GPE
,
Germany
GPE
, And then A skill set that has been refined goes back and it's a bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction that we have. Would you like most about being chief executive? Trying to make a difference I have.
Human interaction brainstorming teamwork you know if you look at the agile way of developing our new our new initiatives around IT From representative from business, technology, compliance risk, all being in
one
CARDINAL
room, and instead of saying you do pieces, how do we resolve the mortgage product? You can do that in the office. You can do that remote. Talk to me Attracting talent. So, do you worry about, you know, some of the bright, young minds going to,
JP Morgan
ORG
, Goman,
Sax
ORG
, because they pay more. Would you worry about them going to crypto or Google because it's exciting? Well I think what I have found is that the bright minds As attracted by money as they are and probably more by
Version
PERSON
. What's the challenge? What do I learn Is this company doing things that I am proud of Care for the environment. Do they care for the communities? Will I be followed in my career and develop which is why we just launched the University These things especially in
the early years
DATE
Quite a lot of space in their decision As they move through And they come in and they move through when what takes places how do you treat them how do you track their career manage their career do you give them opportunity that's why I think we are very fortunate that you try it I can have A young person from
Bosnia
GPE
who start in the leading back in
Bosnia
GPE
does a tour into
Austria Italy Germany Serbia
ORG
and then A skill set that has been refined goes back and it's a bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction that we have. Would you like most about being chief executive? Trying to make a difference I have been told by many people that no, you know, this cannot be done or this is difficult. A little bit my chance to try and do what I think I it's right It's right is usually I get it from talking to people who and if I can make a difference to unicorn and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And I helped What are our principal what we stand for I think that will be a win. Executive job came up would you be up for it I love you and you create too much Thank you so much. Thank you. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible To the software that is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution we don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
I think that's one of the attraction that we have. Would you like most about being chief executive? Trying to make a difference I have been told by many people that no you know this cannot be done or this is difficult this is a little bit my chance to try and do what I think I it's right What I think it's right is usually I get it from talking to people who any if I can make a difference to unicorn and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And a helped What are our principal, what we stand for? I think that will be a win. Executive job came up? Would you be up for it? I love you and you create too much. Thank you so much. Thank you. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible To the software that is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. The
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
Bloomberg
GPE
has enhanced search on the terminal to deliver what you need when you need it now And everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions What do you want to know
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Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks for having me. Just found out we actually lived in the same dorm in college. So it's been almost a year since you took over From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to unionize in
Amazon
ORG
warehouse your
first
ORDINAL
Work technology conference. Thank you. I wanna start with a quick report card.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. BSO Now your online home for
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DATE
Boston Symphony Orchestra
ORG
and
Boston Pops
ORG
performances see new concerts that go behind the scenes plus acclaimed archival concerts visit
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. Org slash now with a music plays on BSO season sponsor
Bank of America
ORG
Thank you
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks.
Just a few years
DATE
apart. So, it's been almost a year since you took over From
Jeff
PERSON
I CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. I wanna start with a quick report car.
February 2021
DATE
Jeff Bezos
PERSON
shock the world by announcing plans to step down as amazon CEO Later he passed the rains to andy jassy his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profit
Amazon
ORG
web services. Test date on his executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. How does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back? Me on this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade Your view of
Amazon
ORG
's performance And we've got time later to to really dig in. But quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
with Well, I think we, you know, I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've Are good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much of the
PPE
ORG
and food and essential items and people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Never happened before but it was really hard to do that and we had to take the really big footprint of fulfillment center footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
. We built out that transportation network in
just a couple years
DATE
. You know we nearly double the size of our workforce during that time and I think you saw it another Businesses, you know,
AWS
ORG
is a really big part of helping And governments have a business continuity during the pandemic and so many companies in organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that Information. So, what about investors? I mean, the stock is.
The
first
ORDINAL
vote to unionizing amazon warehouse your
first
ORDINAL
Bloomberg Thank you. I wanna start with a quick report card. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later he passed the reins to
Andy Jassie
PERSON
his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profi
Amazon
ORG
web services
Basils
PERSON
has stayed on as executive chair leaving Jassie to navigate a critical inflection point in
amazon
ORG
's history. Rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back. On this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade
Review
ORG
of
Amazon
ORG
's performance And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
Customers. Myself during the year or not but I I'll give you my take you know I think with respect to customers I think we've done a lot of good You know and I and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
you know so much of the
PPE
ORG
and food and essential items and people equipping their home offices
Bought
ORG
from
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Ever happened before? What was really hard to do that? And we had to take the really big footprint of fulfillment center footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and doubled it in
24 months
DATE
. We built out that transportation network in
just a couple years
DATE
. You know, we nearly double the size of our workforce during that time and I think you saw it another Businesses, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and So many companies in organizations in
the last year
DATE
made the strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that transform So, what about investors? I mean, the stock is down significantly from a peak Obviously there's broader market turmoil Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37
CARDINAL
year%, over year, it'll it's not a
74
CARDINAL
bill
Runway
ORG
business. It's pretty unusual growth and we grew
58
CARDINAL
year% of year
DATE
in our advertising business. You know, it's a
30 One 1 billion dollars
MONEY
revenue run rate business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
but I think the real challenge for us there is on the cost side and there have been several things Happen. Some of which are more control than others. You know, I think the part that's less control is really around inflation and I think we thought that inflation would start to attenuate in
2020
DATE
And with the war in
Ukraine
GPE
, it just went the other way. It has significantly accelerated. So, the cost of trucking and line hall and ocean and air and fuel is just substantially going up and I think that will tenuated some point. No one knows how long that'll take I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic It's a weird to make decisions you know I made
2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building on properties where we don't need it yet and we've let a number of leases lapse and not a small number, you know, both those things. We've had a lot of occasions in Where we've worked on productivity, made improvements, and we have a lot of clearly to find issues and I'm confident we're gonna get back to the.
Structure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spend a lot of time helping them make that transformation. So, what about investors? I mean, the stock is down significantly
Peak
GPE
last year
DATE
. Yeah, I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know,
2021
CARDINAL
group
37
CARDINAL
year% over year and it's not a
74 1 billion dollars
MONEY
revenue run rate business it's pretty unusual growth and we grew
58
CARDINAL
year% over year and our advertising business you know it's
Two 1 billion dollars
MONEY
revenue runway business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
but I think the real challenge for us there is on the cost side and there have been several Have happened. Some of which are more controllable than others. You know, I think the part that's less control is really around inflation. I think we thought that inflation would start to attenuate in
20
CARDINAL
To and with the war in
Ukraine
GPE
it just went the other way and has significantly accelerated so the cost of trucking and line hall and ocean and air and fuel is just substantially going up and I think that will tenuated some point no one knows how long that'll take I think the more controllable areas for us are really around fulfillment Capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic and so we had to make decisions, you know,
mid 2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for. And so, you know, we we end up with more capacity than we need right now and there's Things that we're working on. We we've stopped building on properties where we don't need it yet and we've let a number of leases lapse and not a small number, you know, both those things. We've had a lot of occasions in our Where we've worked on productivity, made improvements, and we have a lot of clearly defined issues and I'm confident we'll get back to the right level of profitability. You are gonna sublieze
30 1 million square feet
QUANTITY
of space. Is there a mistake in
the 2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision. We made the decision to air on the side of our consumers and sellers. Now, how would you grade
amazon
ORG
's performance with employees, your colleagues, there has been some high profi Yeah I think that And when I started in this gig we had just create a new leadership principle distribe to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion but I still think there are Areas that we can keep improving. You know, and I think
Yo
PERSON
the first one I I'd mention is safety you know I think that you know in our fulfillment centers that is the top priority and you know when you get into the details the numbers and outside of all the spin of it all you know we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have, we've notified kind of a top
100
CARDINAL
list of Areas that we can be better at that we are just metronomically stepping through and so we've made a lot of progress but we've a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Tesla laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed its forecast for global growth. How do you feel about the economic climate? I wasn't planning on giving any guidance to the camera. Super bad or super super bad. I think there's some things released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline And if you believe that that equation's gonna flip at some point, which we do, I think it will,
Call number you know both those things we've had a lot of occasions Where we've worked on productivity, made improvements, and we have a lot of clearly to find initiatives and I'm confident we're get back to the right level profitability. You are gonna sublieze
30 1 million square feet
QUANTITY
of space. Is there a mistake in the Because of the horrible thing Have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going 39
year% or year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision. We The decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, there has been some high profile. Yeah. Dad And when I started in this gig we had just create a new leadership principle distribute the
earth
LOC
's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion but I still think there are Areas that we can keep improving. You know, and I think
Yo
PERSON
the first one I I'd mention is safety you know I think that you know in our fulfillment centers that is the top priority and you know when you get into the details the numbers and outside of all the spin of it all you know we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have we've notified kind of a top
100
CARDINAL
list of Areas that we can be better at that we're just metronomically stepping through and so we made a lot of progress but we've a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. Tesla laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed its forecast for global growth. How do you feel about the economic climate? I wasn't planning on giving any guidance to the guy. Super bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline And if you believe that that equation's gonna flip at some point, which we do, I think it will it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few, obviously, in
25 years
DATE
that
Amazon
ORG
. Customers change their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you know, Probably
3 to 5 years
DATE
long and we're gonna continue to event. We're We have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employees who are
Paid
ORG
in stock. You know, outlook, I haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do and anytime I've tried to a little bit I've been wrong. So, you know, I think it's it's pretty hard to Hard to predict what's gonna be in any short period of time. I do really believe that
Ben
PERSON
In the short term the stock market tends to be a voting machine in the long term intense to be a weighing machine. I think if you you know we've been through a lot of points in
25 years
DATE
and
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down but you can't really control that. You know, we have a concept we talked about a lot at
Amazon
ORG
. Woods and outputs. You know, in the ultimate output for a company, you share price, you know, and then other big outputs or free cash flow or profit or revenue. You can't Manage the outputs you have.
Although of the worldwide retail market segment share is offline And if you believe that that equation's gonna flip at some point, which we do. I think it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few obviously in
the 25 years
DATE
Customers change their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you Probably
3 to 5 years
DATE
long and we're gonna continue to invent. We're gonna continue to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. Now, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been over valued and this also course matters to employees who are
Paid
ORG
in stock. You know, outlook, Haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public. I have never tried to predict what the stocks gonna do in anytime I've tried to a little bit. I've been wrong. So, you know, I think it's it's pretty hard to Pretty hard to predict what it's gonna be in any short period of time. I do really believe that In the short term the stock market tends to be a voting machine in the long term it tends to be a weighing machine I think if you you know we've been through a lot of points
25 years
DATE
to be at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talk about a lot at
Amazon
ORG
. You know in the ultimate output for a company a share price you know and then other big outputs or free cash flow or profit or revenue you can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns Investors and I expect that to be true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun dart
PERSON
patchai
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
my crown technology
Sanjay Mahotra
PERSON
and that's
Gap VM
ORG
ware and that Count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top?
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is it Is it something else Well, you know, we have a unique way that we look at Big new investments and I'm not sure it's right or wrong. It just happens to be our way. And we ask ourselves when we're considering something. We ask If it's successful can it be big and move the needle on
Amazon
ORG
is it being well served
today
DATE
Do we have a different
Imports and outputs you know in the ultimate output for a company a share price you know and then other big outputs of free cash flow or profit or revenue you can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns for investors and I Happy true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so
Access
PRODUCT
the financial world on demand Hear from leading economists Policy makers And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring just see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but the
Often
PERSON
says made in
India
GPE
.
Alphabet sun darkella IBM's
PERSON
Irvin Krishna
PERSON
my crime technology
Sanjay Mayhotra
PERSON
and that's just And that doesn't count
Indians
NORP
running companies all over the world Why have so many
Indians
NORP
risen to the top
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world. While the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up
about three
CARDINAL
fourths of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
. And it's a safe path that What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is it Well, you know, we have a unique way that we look at Big new investments and I'm not sure it's right or wrong. It just happens to be our way. And we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask if it's successful, can it be big and move the needle in
Amazon
ORG
? Is it being well served
today
DATE
? Do we have a differentiated approach Do we have confidence there if not can we acquire quickly if we like the answer those questions we'll go pursue with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation investments that seem pretty obvious like you know when I got to that company was Only retailer and then we expanded to music and video electronics and obvious people. Other times that process does not lead to investments to seem obvious to people. I mean
AWS
ORG
was something that people externally and internally thought was little bit nutty at the time. But just What
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss and
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Flex
PRODUCT
in Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by Of prime and and so we have a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show Reacher earlier in
the year
DATE
was a huge hit we you know we Nasal season we we just launched new boys season which is are you a big boys fan? Is
Amazon
ORG
a bot? It's very good. Of course we've go to the rings coming up you know.
Four
CARDINAL
questions. We we ask If it's successful, can it be big and move the needle in
Amazon
ORG
? Is it being well served
today
DATE
? Do we have a differentiated approach Do we have confidence there? If not, can we acquire quickly? If we like the answer to those questions, we'll go pursue it with a single thread of team that isn't distracted by the rest of the business and sometimes that leads to innovation, investments that seem pretty obvious, like, you know, when I got to the company was Only retailer and then we expanded to music and video electronics. People. Other times that process does not lead to investments to seem obvious to people. I mean
AWS
ORG
was something that people externally and internally thought was glued but nutty at the time. But just imagine what
Amazon
ORG
would be
today
DATE
without AWS and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss and
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by Of prime and and so we've a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show Reacher earlier in
the year
DATE
was a huge hit we you know we Season we we just launched new boy season which is are you a big boys fan? Is
Amazon Vott
ORG
? It's very good. Of course, we have go to the rings coming up, you know, in
Thursday
DATE
at football. So, I'm very
bush
PERSON
about it. We also, We're excited about what we've done with
MGM
ORG
you know I think some of the assets there will go very well with the rest of what we're doing entertainment wise. So if you look at
Warner Brothers Discovery
ORG
in Paramount Stars and Global they're building really significant Businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant grocery business which is, you know, early stages for I I'm excited about
Kyper
FAC
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about The world is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You'll building the world's best personal assistant. We have, you know,
200 1 million
QUANTITY
endpoints already that are using
Alexa
ORG
. We're Going to something there and and then you are automatist driving ride healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that Was the chance to be really significant business. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely Company. Just like we were when AWS became successful. So, I think they're very worthwhile investments and bets and I'm optimistic We didn't mention
Astro
PERSON
obviously the powered by
Alexa
ORG
Hey Facebook I don't yet where is it? Widely available for sale. What's I hope you get one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role.
These days
DATE
, what kind of executive chair he really is, he said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside, it looks like he's really focus
Philanthropy
ORG
he's focusing on space what kind of an executive chairman is he What year
Jeff
PERSON
is always gonna be involved and he has you know I feel very lucky to have been in
Amazon
ORG
for
25 years
DATE
I feel very lucky to have worked directly for
Jeff
PERSON
for
20
CARDINAL
of them and we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and
Jeff
PERSON
for
20
CARDINAL
of them and we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is to optimize for customers and how high standards they need to be you know given how easy it is for people to switch and Importance of invention and speed and so you know, I just feel very lucky to have had the chance to work so closely with him. So, is your relationship? I mean, he was your only boss
Years
DATE
, right? It's a relationship fundamentally And it was when you were the head of. Yeah. Of course, you know, every single job you have, the relationships different. You know, remember, my
the first couple years
DATE
I work for
Jeff
PERSON
, I work is what we call the shadow then what's really like achieve the staff and That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and and it's different when I'm in the CEO role but you know the constant has always been that we have a great relationship We collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer.
Second
ORDINAL
only right now
Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses. When you look at someone like
Chris Mall's
PERSON
who I think some people look at as this modern day hero who got fired, pulled off this
un
ORG
What's your message to someone like him? Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a union or not. They always have had that choice and it continues Their choice and you know, we happen to think they're better off without a union for a number of reasons. Including the fact that, you know, it's it's much harder when you have a union to have a direct relationship with your manager And to get things done quickly. So, if you see something on the line that you think could be better for your your team or you or your or customers, Yeah, just go to your manager and say, let's change it. You know, there's a whole process in in bureaucracy that you have to To be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up and we'd much rather hear from every employee. Whatever is on their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time. You have to Really competitive benefits and then I think if you look at Amazons they're very unusual in this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
The starting salaries now over $
18
MONEY
an hour which you know Is more than double the federal minimum wage. You get full health insurance and
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education, you haven't had one, we've a career Program the website associates be able to do so that is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need to You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. What is the mark that you want to make Still. People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the The internet revolution. Who kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Stocked early enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need.
Asking what kind of material we would need and what quantity we would need. I'm
David Weston
PERSON
. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. The
FTC
ORG
has revamped its anti trust inquiry into
Amazon
ORG
and by some accounts is Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? Large company that's growing is too significant like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody you look, that we would stand up to that scrutiny and I you know, I think What we tried to do in running the business. We can't control You know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at the fact, if you take out of, you know, take out of the equation that they're they're may not be the most objective, you know, leadership Comes to
Amazon
ORG
and that organization. If you look at the facts, you know, in our retail business, we're about
one%
ORG
of the worldwide retail market segment share. And remember,
85%
PERCENT
of it is still offline. And if you look in our
AWS
ORG
business
Yo
ORG
about depending on how you measure it
95%
PERCENT
of the worldwide global IT
Spanish
NORP
on premises you know and then we have a cloud business and then we have a portion of that you know we were leading market segment share in Part of this but we operate you know who we compete with
NWS Really
ORG
on premises IT in addition to the clouds. So, you know, these are relatively small percentages of of the entire pie and you can kinda step through all the businesses and I think simply because you've been successful in a few different businesses, doesn't somehow mean that you have a natural market power. It just means you've been Won a couple different customer experiences but we still have AA relatively small amount of market segment share in those areas. What about the
SEC
ORG
you're being sued by them over
third
ORDINAL
party data and how you've used it do you think in the past
Amazon
ORG
made mistakes with letting employees internally see how those
third
ORDINAL
party sellers were doing Pretty good control. I mean, you know, we've, of course, disagree with the premise of that but I would say that we have very good controls with respect to the data that the different employees sats are able to see and by the way I think that we can be better for sellers you know I I I think that Yeah we can have better tools from the get started we give better tools from the manage what they're doing across their their different
Amazon Units
ORG
. I think we can communicate better. There's a whole bunch of things we can do better. And we agonize over every single email or communication we get from sellers. We do very regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with And I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not it can completely changes what's Sellers don't really long for e-commerce software that exist in lots of places And it is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses they're building. So, we have a lot of work to do there like we do in a lot of other I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still really, you know, significant issue for Sorts of businesses. We have worked really hard to open a lot more. Going to present.
Electronics, chips are still really, you know, significant issue for all sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports in the in the increase our capacity in getting products in but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously What is the mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well I I don't I don't really think of it that way Emily I mean I I don't think it's really about any jazzy era or anyone person you know and and and by the way AWS was not about anyone person that you know if you spend a time on AWS That is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom. And then the number of inventors and people care about customers
Operate
NORP
you know something where it has to work almost like a doubt and it's it's always teams and so I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses
85%
PERCENT
of it still lives offline. Oh my god, I think we have a lot of upside, a lot of growth, and I think as much invention as we've seen
Last 25 years
DATE
, you know, the time I've been there, I think it Small compared to
the next 25 years
DATE
. There is a lot for us to invent on behalf of customers and so, you know, I'm excited to be part of the team that makes it happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we were responsibly do that and so you know it's it's it's a long journey that we're working on but I'm excited to be part of it and you know I Garden for a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you. Thanks.
When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. Francina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see you at some point but there's a significant unseen cost to the modern era of global
Hummers
PERSON
. Of all the worlds is huge.
3
CARDINAL
may% not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths?
China
GPE
slows the
Fed
ORG
worries and former President
Trump
PERSON
strikes back this is Bloomberg Wall St I'm
David Weston
PERSON
. This
week
DATE
's special contributor
Larry Summers
PERSON
of
Harvard
ORG
on where the housing market is headed. Softness in the future with respect to housing. International finance on the risk and the opportunity of zombie companies. Money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere. It was
a week
DATE
of signals. Some subtle and some not. Doesn't seem likely to fix. She is confronting a number of both you know short term and long term challenges right now I probably the number
one
CARDINAL
thing is the poor performance of the economy. Former President
Trump
PERSON
kept up his attack on
Republicans
NORP
who supported his impeachment so Congressman
Liz Chaney
PERSON
of Wyoming said she wouldn't stop even after she was soundly beaten in her primary. Near the oval office and I mean it. And there was nothing subtle about the inflation signal we got out of
Great Britain
GPE
coming in over
10%
PERCENT
Explosive move higher in
UK
GPE
guilt yields
Tom
PERSON
and I don't think I'm overdoing it using that language Becoming entrenched. Reading
the minute
TIME
you have to feel that this is a sort of a lead and it supports chairman
J Powell
PERSON
's tone at the news conference following the
June 27
DATE
meeting. Beneficials noted that some Of the economy notably housing we're starting to slow as a result of higher interest rates And if you want a confirmation of just how I'm biggest those
fed
FAC
minutes
TIME
were just take a look at the markets
this week
DATE
with the SMP five Shooting up on
Tuesday
DATE
only fall back down to earth and beyond on
Friday ending the week
DATE
down one. Two% at
42 28
DATE
and the Nasdaq was even worse again climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt by Just under three%
297
CARDINAL
. To help us understand what the market may be trying to tell us welcome now
Bob Prince
PERSON
he's co chief investment officer for
Bridgewater Associates
ORG
and
Ed
PERSON
Hyman chair of Evercore ISI and vice chair of Evercore And let me start with you. You follow the economy and what's going on in the economy. We've talked about the markets. We've talked What's the economy telling us Well you can't
We talked about the markets we've About the
fed
ORG
what's the economy telling us Well, the economy has
two
CARDINAL
parts to it. Obviously,
one
CARDINAL
part is what the real GDP is or auto sales, then there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part Economy is doing okay. As you know, we serve a companies And our retail survey dropped sharply
this week
DATE
but still pretty elevated Housing is really getting hit. But on balance economy is doing okay I think it's probably going
two
CARDINAL
or three% but headed to
one%
ORG
I'm sorry bank loans came out
this afternoon
TIME
and they're up
11%
PERCENT
now. And retail sales
this week
DATE
we're you know pretty decent On inflation which is much more important I I'm pretty convinced that inflation is slowing Of oil prices came down gasoline prices came down And In the weeds used car prices dropped about three% in
the latest month
DATE
And we survey Retailers pricing power that's now plunging you've heard the stories about the inventories being high and we have been tracking that for a long time it's now really coming down. But the most important part and we don't give my state on this or wages. And obviously the labor markets are very tight But they had from the conference board
this week
DATE
A measure of CEO confidence was almost a record low. And then another survey That showed
80%
PERCENT
of workers Or concerned about poosing their job. Go go figure that. But we serve a employment agencies
every week
DATE
And ask them among other things about weight pressure and that's now pretty clearly hooked down So I think you're beginning to see some moderation in wages on top of you know prices now cooling And the economy is calling So
Bob Ed
PERSON
sees inflation started to come down. Questions how fast is coming down but starting to come down. How do you see it? And is it coming down enough and fast enough so the federal not have to go much further in raid hikes? It's definitely on the down but the question is where is it settle out The market are discounting The markets are discounting
two and a half
DATE
. And you know, we're coming down from six So, or higher on the core, right? So, but there are really
two
CARDINAL
big imbalances in the economy right now that are need to be resolved through this tightening cycle and we're we're still in this tightening cycle It's it's too early to really see the effects it hasn't been that long to see the effects and so chances are you're gonna get more that weakness as you as you go along. But there are there are
two
CARDINAL
big imbalances in the economy right now that that they're gonna have to be All one is the level of nominal spending in relation to the to the output capacity of labor Over
the past year
DATE
, nominal spending is up
10%
PERCENT
. And incomes are up
10%
PERCENT
, and if incomes are up
10%
PERCENT
, that gets spent and you get more spending at
10%
PERCENT
. You gotta bring incomes down And if incomes are growing by
10%
PERCENT
but labor can only produce goods at the rate of four% you get a
six%
NORP
inflation rate And that's the basic that's the first imbalance and that's the basic cause of the inflation that we have right now. It's really not the supply chain. It's just too much spending Which came from the monitorization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of nominal spending in relation to bonyards. So normal spending is even higher above bonus than it is above output. It's, you know, seven, seven%, above bonus. So, it's the highest in
60 years
DATE
. So, if, if, if
Spanding
WORK_OF_ART
, if people's incomes are growing Well beyond bond yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit and so
It's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit and so that the the credit numbers it is referring to loans up
11
CARDINAL
You know that's a backstop On the economy and spending. So, so it's it's the high level of spending an incoming relation to interest rates and and labor labor production And it's the availability of credit Sustain that. Policy to bring about an equilibrium. Text me the bar brought us back to wages pretty quickly there and it's one of the issues here where did you say that's the hardest get your arms around where are with wages and that wage price spiral because in fact if we are gonna have continuation people are gonna wanna make more money they're gonna go to their bosses and say you need to pay me more Well CEOs now are really bearish So they're not gonna be happy. If you have a CO one but your
Bob
PERSON
and I think about the same way. But money growth has been slowing for
about 18 months
DATE
. We'll talk about that because it was growing gangbusters for a long time. Right. But you're saying it's turned around. So, in the conventional way, you had the checks, you had the quantity of easing in low interest And so money growth got up to
almost 30%
PERCENT
. Which is Extremely fast and that's why you have the strong number growth. Now, with figures I got
this afternoon
TIME
on bank deposits,
Mardi Gras
PERSON
is well less than five%. And so we've set up the mechanism for this novel growth which is way too fast to slow down but that's what has to happen and obviously, this is a really interesting thing. If it slows down, does it come out of real growth or at a prices? If you have your
10%
PERCENT
normal growth which everybody can understand I think Right now it's about
one%
ORG
real and a nine% price right and if you go to say five% nominal Of what's the mix then? Right Should that fix the inflation problem or at least take us a long way to be fixing it But your total in an economy there are your total sources of funds is your sources for spending and there are
three
CARDINAL
sources there's money There's credit and there's income, right? And so when you get the tight need to monitor your policy, they're contracting money and that's absolutely right. The
first
ORDINAL
effect of a contraction and money is on asset markets. Because if you think about the printing of money by the by the fattering of the central bank they print the money and then they go buy bonds or they print the money and that money then goes into stocks so that money had more most directly effects of financial markets Credit more goes in to spending, right? Because you know, you you take out an auto loan to buy Car. You don't take out an auto loan to buy a bond and the
fed
ORG
doesn't print money to buy a car. They print money to buy financial assets. So, so what you have is a push pull The contraction in liquidity from the central bank is a drag on the financial markets While they're expansion of credit Support the spending And so you've got you got that work in both directions right now. Credits going up. That sounds like it's good. It's gonna spur growth. But that makes it sound like
Need
ORG
credit to come in So probably so in my view of it which is a straight
Milton Freeman
PERSON
take of it of those
three
CARDINAL
pieces that
Bob
PERSON
point out The
first
ORDINAL
one is where it starts. Is the money growth I track global short rates. It's a global economy and they have a higher impact on the
US
GPE
economy than fed funds and they've been going up for
about 18 months
DATE
. Same time that money grows has been slowing. So, I think we're pretty deep in this and we had a pretty good drop in the stock market to your point And and now inflation's coming down. The markets are
Beginning
ORG
to think that this is Introduction.
To your point And and now inflation's coming down the markets are
Beginning
ORG
to think that this is Introduction to the next chapter That the next peel of the onion. Right? So, the money is the
first
ORDINAL
thing, right? The but what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent effects, right? Which means Have to be in a tightening cycle for long enough for that to happen, right? And we've been in a tightening cycle for how
many weeks
DATE
?
18 months
DATE
You have to be in a long enough, right? And so, you know, as we look forward, Think that there's there's gonna be it's too early to tell really how this plays out in terms of whether it's a wheat growth or high inflation or which one but You're probably gonna get some combination of wheat growth high inflation and rising interest rates And all
three
CARDINAL
of those are are rough on asset prices The mix is gonna be determined mostly by how aggressively the
fed
ORG
And stay tight if they have to pay the price of a downturn. Turn next. So, what is really for investors? So, it's too soon to tell. What do we do in the meantime? Or waiting for those answers.
Bob Prince
PERSON
and
Ed Kimon
PERSON
will be back with us for more Wall St Week after the break. Hey guys crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. For something as universally important to human life
Mystery
LOC
surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes that a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understanding It's easy to memorize things that makes you smart. It can Act a lot of facts but if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what you bring figures out while you're sleeping. New construction contracts faltered and while unemployment actually went down more significant was back to back
monthly
DATE
declines and paying jobs. The bottom line seem to be that the economy was beginning to move forward but with many of lagging part And overall at a pace
Embarrass
ORG
the tortoise. That was Lewis Rockeys around Wall St wave back in
August of 1991
DATE
when
the United States
GPE
had just come off of a rosely mild and short recession. The number
one
CARDINAL
song if your murder was
Brian Adams
PERSON
, everything I do, I do it for you and the top movie was terminated too judgment day. Still with us or
Bob Prince
PERSON
of Bridgewater and
Ed Heyman
PERSON
have ever courage. So, it's Have a different world
today Bob
PERSON
. For example, on the job situation, we still have a pretty robust jobs economy.
Hey
Bob
PERSON
for example on the job situation we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are on the tightening cycle what comes next what does that say to an investor? Well, right. Now, we're in that in between stage right now, right? So, you, if you, if you go back just to not too many months It became evident that we had a self sustained inflation that there was gonna be a tight near monetary policy. The markets priced that in yields went up You got to take me in a policy it's still happening it's not over
Marcus
LOC
got a little bit excited about the dip in some of the inflation they started buy down that yield But that we've already given up
half
CARDINAL
of the yield rise that occurred and that actually means the
fed
ORG
needs to do more than if the yields had stayed up where they were, right? Including equity. So, So we're still in this thing we're still in this tightening cycle And like I said there there are really there's gonna be a mixture of
three
CARDINAL
things and you don't know what the mix is yet cuz it's too early to tell but you're gonna get some mixture of wheat growth, high inflation, and rising interest rates. The more the interest rates rise, the more it's the wheat growth. Let's see interest rate rise the more it's a high inflation Text the foot off the break you're gonna that that inflation improvement's gonna go away and you're gonna you know they're gonna favor growth so you don't know which which how they're gonna play it quite yet. So, what we try to do in this kind of environment is is maintain some balance, right? Diversification, obviously, don't Too heavily committed to anyone direction but also even within the equity market you know structure and equity portfolios that have AA cash flow and balance sheet base under them. So that if if the tightening is very aggressive that there's Strong enough balance sheet to hold that up to to sustain their their position in the markets or a sustain a positive cash flow and I think that they companies that are you have a lot of debt in relation to enterprise value or vulnerable, profit margins, that sort of thing. You know, are they are the type that are Vulnerable for that environment. An awful lot hinges on the
fed
ORG
. Surprise, surprise.
Jackson Hole
GPE
coming up
next week
DATE
, okay? A lot of people are paying attention to
Jay Powell
PERSON
is the same.
Last year
DATE
, at this event, he was talking about transitory still. That doesn't work so well
this year
DATE
, right? So, how much guidance can the
Fed
ORG
give us what exactly where they're heading? Well it's hard to hard to know I do think we're gonna get a financial crisis some where somewhere pretty soon It's always been part of the of the tightening cycle But like you point out David, yo,
last year
DATE
, it was really about transitory. He had
five
CARDINAL
Went through
five
CARDINAL
different things that would prove transitory And I I personally think the fit is now on the other side of the wrong foot. You know, now they're doing the entrenched and you know,
a year ago
DATE
, I thought
Bonnie
PERSON
is gonna go to five% and fit funds go to five% and I'm not quite sure what's happened but Money growth kids flow dramatically And combine prices here and come down dramatically and now I'm seeing pricing power coming down and so I think we've made a lot more progress on inflation than I expected and and that's why the market was going up until
today
DATE
but that's that's If inflation keeps coming down Then the market is gonna appreciate that. I don't understand
Bob
PERSON
. We heard why
Ed
PERSON
thinks the feds drop maybe he's got a bit easier actually with some of the things that have happened. But financial conditions Have not tightened. Actually, if anything, do that in someone looser. That makes the
first
ORDINAL
job harder, doesn't it? Literally
the first quarter
DATE
that markets were doing the
Fed
ORG
's job entirely. Yeah. And then the
Fed
ORG
joined in and wants the
Fed
ORG
joined in and the market saw some, you know, positive signs of inflation. You know, they actually pull back and so, bonus came back down, equity yields, you know Came back down And so You know that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted If if you'll be
Oh You know, that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted. If yields had stayed where they were It would be that much less that the
Fed
ORG
needs to do but the fact that the yields have actually dropped some and can kinda give him back some of the work that they were doing. It's that much more that the
Fed
ORG
needs to do. And so I think you know it's
Ed
PERSON
referred to last that you know you you raised it and then you know we talked
Last year
DATE
of
Jackson Holse
ORG
news but They were clearly wrong about transitory inflation if if you actually look at the indicators that they follow and they tend to be lagging indicators I haven't heard yet an explanation about how they think inflation, why they think there is an inflation, why they think that that was wrong, and I think that that causes some cause you to question The the how well this this process is gonna be manage is gonna be very tricky. Explain to us what went wrong and why they're not gonna do a mistake again for us to really believe in this time. Oh be helpful. You know, from my vantage point As you can see What they missed was that fiscal stimulus quantitative easing led to a
30%
PERCENT
increase in the money supply and that did it If you look back at that
Jackson Hole
FAC
they completely missed that now
Mardi Gras
PERSON
is plunging and can my prices are coming down all sorts of signs that are early signs and so the job's not over by any means. But there's progress and if you look back like pickate the 70s when inflation peaked The stock market started to respond to that when you had a very high inflation period like we have now Do you agree with
Ed
PERSON
that in all likelihood we'll have some sort of financial crisis that's what happening happens in serious tight Odds are pretty good, yeah. Yeah, I mean, we haven't had enough tightening yet to really have that. Odds are good. Yeah. I mean, we haven't had the downturn yet. If there's gonna be a downturn, it hasn't happened yet. It's gonna be hard to bring inflation down. Are you gonna bring nominal spending down from
10%
PERCENT
to five% Without a significant And credit you need to slow credit growth by
about half
CARDINAL
money growth is slowed but you need to slow credit growth in
half
CARDINAL
but it's still rising you're gonna have to you're gonna have to hold interest rates up enough and that's when thing that's when bad things happen I have to tell you this is not a bad thing it's Treat to have the
two
CARDINAL
of you here in Wall St. Really? Thank you so much. That is
Ed Himan
PERSON
. I've ever caught and
Bob Prince
PERSON
of Bridgewater. Coming up, we'll take a look at what's coming up
next week
DATE
on global Wall St. That's next on Wall St on
Bloomberg
PERSON
.
Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
. No one covers the world like
bloomberg
PERSON
. In
the coming months
DATE
do you see that coming We will not just cut The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
. That is a great question. Hey Hey I'm glad you asked that. This is Wall St Week. I'm
David Weston
PERSON
. Let's take What's coming up next?
This is
Wall St Week
ORG
. I'm
David Weston
PERSON
. Let's take What's coming up
next week
DATE
on
Global Wall St
WORK_OF_ART
starting with Julia
Sally
PERSON
in
Singapore
GPE
. Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan primary also on this later interest rate decisions from central banks in
South Korea
GPE
and
Indonesia
GPE
inflation figures from
Singapore
GPE
and
Hong Kong
GPE
trade data Earnings across the region include
Qantas
GPE
,
Petro
GPE
,
China
GPE
, and food delivery giant meat one,
Bloomberg Intelligence
ORG
forecast,
Chinese
NORP
companies, maybe set to report their worst earnings
2 years
DATE
the focus in
Europe
LOC
for
the coming week
DATE
will be the energy crisis in
Europe
LOC
and we had a lot of developments in
the week
DATE
prior you had the
Ryan
PERSON
dropping to levels that made it untenable to have shipments across it you had record high energy prices in
France
GPE
and
Germany
GPE
you also had mat gaps prices New records as well. So, as we head into
this week
DATE
, the question is going to be, how this impact industry, how it impact individuals? Will there be more demand rationing and demand destruction? We've already seen some of it with different industry having to shut down power plants but how much worse can it get and what will be the impact on the economy? Big weekend economics we have
the Jackson Holston Posium
ORG
coming up and I think our
Bloomberg
GPE
economics team really focused to hear some hawkish comments from chairman
Jay Powell
PERSON
reassuring the market there was no devish pivot and that we are still ago in
September
DATE
for
50 or 75
CARDINAL
basis Away from economics back to some of the fundamentals as well.
Big week
DATE
for earnings too. Zoom of course the video conferencing company. How do they sort of continue to grow in the face of further reopening trade maybe less demand for that product? Finally,
Peloton
ORG
, we've heard a lot from this company about assembling some of the bikes at A lot of cost cutting initiatives, all the help sort of get that company back on track. That too will be a key focus for us
next week
DATE
. Thanks to
Juliet Sally
PERSON
,
Danny Burger
PERSON
, and
Taylor Riggs
PERSON
. Well some of those who maybe caught are those so called zombie companies who've loaded up on debt when it was cheap. International finance. That's next on Wall St Week on
Bloomberg
PERSON
. A lot of the satellites have propulsion systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offer to help these companies know how to maneuver their machines
Satellite
PERSON
. That for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've been
The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a clouded debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the lightlier that the collision's going up
Communicating
PERSON
for staying in touch It was nice while it lasted all that support from the
fed
ORG
from oh interest rates. To pumping money into the economy more direct We are deploying these lending powers to an unprecedented extent enabled in large park by the financial backing from the
congress
ORG
and the treasury. We will continue to use these powers forcefully, proactively, and aggressively until we're confident that we are solely on the road to recovery. All of which allowed companies to borrow as much as they wanted which was The 800 lb gorilla which eventually we're all gonna have to question is whether or not this build up in corporate leverage which we've seen over
the past 3 or 4 years
DATE
is that sustainable but now those happy
days
DATE
are over as the
Fed
ORG
has reverse course and says it will keep raising Until the inflation dragon is slain the idea that we are going to start cutting rates
early next year
DATE
when inflation is very likely going to be well well inaccessive our target I just think it's not realistic where does that leave all those companies who've borrowed so much well at least some of them are so called zombies No not those zombies companies that don't generate enough cash to pay their debt and that leads economists like neuro-robini to say we're going to see some of them fail which may just be what we needed to get to the other side. You're tons of firms that were highly Zombie Now that
the Titan Inflation
FAC
is higher that zombies are gonna collapse. And to take us to the strange and exotic world of zombie companies who have sonia gibbs she's managing director and headed sustainable finance at
the institute of international finance
ORG
so
Sonia
PERSON
Thank you so much for joining us on
Wall St Week
GPE
. Let me start with those basic questions. What exactly is a zombie company and how many of them are there out there?
First
ORDINAL
of all, to take a step back. What you need to think about is that over
the past 10 or 15 years
DATE
, global debt levels have skyrocketed. We've had very low interest rates and for example, non-financial corporate debt around the world is now close to
100%
PERCENT
of GDP. And that's more than double what it
Decade ago
DATE
so that's a very worrying backdrop And so what we mean by zombie companies is a company that essentially has to borrow to keep going. They're highly leveraged. They're not growing very fast. They're revenues are not up to par. And at the moment they face a very difficult situation you've got higher input cost so your commodity prices are higher wages are rising at the same time you don't earn enough revenue to cover all of these higher costs and your debt service so if you have a ratio of re To interest costs that's
one
CARDINAL
or less if you can barely cover your debt service cost we call you a zombie company and it's a very good name it's very evocative And for how many amuse difficult to calculate right because for a lot of firms that for example art publicly listed the information might be less available they might be smaller non-public companies but
the federal reserve
ORG
estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
Might be less available. It might be smaller, non-public companies,
The Federal Reserve
ORG
estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
firms fall into this category It's also important to remember that this is not a static world. It's not once a zombie, always a zombie. Conditions change and in fact, becoming a zombie company is a little bit cyclical. In the sense that when times are good, maybe interest rates are low, growth is high, maybe you're not a zombie. But then, you know, bad things happen. Pandemics happen. Shocks happen. Interest rates go up And a company that was formerly doing reasonably well Might suddenly fall into the zombie category. So so you mentioned the overall debt load which is true certainly in
the United States
GPE
and not just in
United States
GPE
in part because interest rates are so low there's some very very successful healthy companies that loaded up on debt cuz it was so cheap but and whenever we've talked about this risk in
the last few years
DATE
I said don't worry as long as interest rates are low we're fine it looks like those days maybe on their way Higher interest rates. So, what kind of pressure is that put on these zombie companies? Well, I think it's AA good analogy, right? It's all fine until it's not. And so you've had AA kind of a confluence of factors that have hit pretty much at the same time. You had a pandemic which hit growth. You had commodity price shock. You have writing inflation. You have Interest rates and you also have firms who's who's business models. For example, have been entirely changed by the pandemic. Amongst the list of zombie companies you might find a company like we work. You know, a company that has been very successful but at the same time, the pandemic has changed a lot of things for that for that company. Carnival cruise lines is another good example of a type of company who's now in the zombie category or some of the meme stocks, you know,
AMC
ORG
, your Up. So these are really household names. Think that the difficulty is at a point in time when you've got wages rising when you have higher input costs these firms may not be able to borrow as much as they need to borrow to keep afloat. Tend to find zombie companies concentrate in certain sectors or in certain size corporations So I think it's fair to say that the the sectors that are worse off in terms of percentage of zombie firms are probably in manufacturing and in retail and retail of courses industry that's undergoing secular change over the long term as we move to sort of more online no less brick and mortar think there are there are underlying structural issues there and in Sector in any case but I think some of the companies that are hardest hit tend to be smaller firms and if you think about a small company there sort of inherently face greater credit risks than some of the larger better established companies that have long standing histories and track records in borrowing their you know Familiar to investors smaller companies have a harder time accessing funds especially when when borrowing conditions are difficult and with some of these companies having fallen on hard times during the pandemic You know there are estimates that suggested in some cases
as much as 25 30%
PERCENT
of the small cap companies especially if you include unlisted companies could be falling into this sort of zombie trap I wonder saying about the larger effects on the economy. Obviously, we don't wish ill for any corporation but there's gonna be a lot of stress put on a lot of the companies you're describing right now. And so far is that all gets sorted out to use a eufacism perhaps. Is there some benefit for the economy and redeploying the capital they represent into things that might be more productive than Enterprises. I think we might wanna think about this in a short term and a long term context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here which is spent over
800 1 billion US dollars
MONEY
since the pandemic hit to support its companies so you avoid bankruptcy, you keep people employed, you keep these companies float, but there's Longer term cost to be paid for that because when you think about it money that's being spent Is money that could be more productively deployed elsewhere you could put it in there to capital spending you could put it into infrastructure you could put it in a new
Indian
NORP
Float is money that could be more productively deployed elsewhere. You could put it into capital spending. You could put it into infrastructure. You could put it in a new industry, new technology, maybe. In the ESG world or or green technology that can really deliver a boost to productivity and growth. So it's kind Foregone opportunity in that sense.
Japan
GPE
is a good one. It strikes me. There are political consequences of letting zombie companies go ballet up. You know that the politics of these things are are always difficult, right? I mean one of the the conclusion is that you can come to is it if you have a high proportion of of zombie companies if you have companies that you're worried about keeping a float there's political pressure to keep that going. The more that borrowing cost rise, the more the interest rate rise, the harder time these companies will have keeping going. So if you're in a world where inflation is rising and you have central banks having to make a very difficult balance Controlling inflation and supporting growth which can involve supporting some of these less profitable companies. You know, it's a it's a it's a rock and a hard place. You know, where do where do you draw the line? Sign you if in fact the
fed
ORG
could have been held responsible for this company and maybe it's not what they're intent but it's certainly was a consequence of extraordinary low interest rates for a long time. Think ultimately has arbitraries of the price of money you could hold the
fed
ORG
responsible for everything really but certainly it was an inadvertent consequence of a low interest rate so I mean if you think of the the many many years when we had low and in some countries even negative interest rates there were warnings sounded The time. There are risks to financial stability. There are risks to long term growth. It's going to stoke inflation. It's going to distort financial markets. Is distort asset valuations. And in fact you can think of zombie companies as a type of distorted asset valuation right because a company of it cannot generate enough revenue to support its debt service and it's running costs arguably is trading at an inflated valuation because it can continue to borrow at low rates so
Consequence
ORG
of something that had to be done to keep growth going during the the after the financial crisis International finance pleasure to be here.
Larry Summers
PERSON
of
Harvard
ORG
. This is Wall St Week on
Bloomberg Companies
ORG
now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or robot is gonna Whether or not a human ever gets their eyes on it. That might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination. For the
FTC
ORG
, I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
You trust them to self regulate
AI
ORG
. This is Walsh St. I'm
David West
PERSON
. So, we're gonna wrap up
the week
DATE
once again with our special computer,
Larry Summers
PERSON
of
Harvard
ORG
.
Larry
PERSON
, thanks so much for being back with us. So, let's start with those fed minutes that everybody was waiting for eagerly and they came The market didn't know quite what to do with him what did you make out of those minutes They confirmed what I suspected Which was that the
fed
ORG
doesn't know where it is That the world is very ambiguous at this point And Of a meeting or a very poor way to convey
Collective
PERSON
message Look the
fed
ORG
has a fundamental problem About which it is not yet willing to be realistic And that is that it is exceedingly unlikely That inflation can be brought down to target levels Without a substantial increase in unemployment they To Very concerned about unemployment and about inflation and the reality is that it's probably not so realistic to think That they're gonna get inflation all the way down without getting unemployment up And they don't wanna acknowledge that and that forces a certain confusion Into all of their
Understand
FAC
why they don't want to acknowledge that part of the problem is they've taken on an excessive obligation To So I think they're in AA very very difficult situation I don't know to what extent they're gonna choose to take the pain that is ahead on the stag side and to what extent they're gonna choose to take it on the flash Side Remains to be seen. I suspect in some ultimate sense, they don't really know. Either which way it's going to go, Gotta worry them. That Financial conditions are now Really looser than they were when the
fed
ORG
last met And Middle of a tightening cycle Substantially loosening That has to make a central bank. Nervous. David there's
one
CARDINAL
other aspect of the situation that I think is very important and under recognized What's happening with
Russia
GPE
and
Ukraine
GPE
what's happening with drought all of it they don't really fully internalize that oil prices and wheat prices have both come down substantially At our predicted to come down substantially in the future. Concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that when headline inflation is lower Inflation And I don't see that we're really making any great progress with respect to core inflation i don't see it with respect to the wage numbers I don't see it with respect
Median
NORP
or trimmed mean Measures Substantial Inflation challenge ahead of us.
Measures And so I think we've still got a substantial inflation challenge ahead of us. One of the things that
Fed
ORG
emphasize in the
minutes
TIME
besides really being concerned about inflation expect On the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your ticket at the housing market. Some people say we're in a housing recession right now. I think you have to distinguish
Movers
NORP
from stairs or to put a differently you have to Look at you have to think about what the right way to look at rents is. Here's what's true What's true is that last year People who were signing new leases We're paying
15 or 20%
PERCENT
more than they had
a year ago
DATE
. Nothing like that Fatty into the consumer pricing decks or the feds preferred measures
PCA
ORG
index All the fed through The small fraction of people who saw their rents change And a constant rent for everybody else. What that means is that down the road like now You're seeing inflation Substantial increases and so we're gonna see Housing price inflation in the measures of inflation that are used For
another 6 to 9 months
DATE
that's a different thing than what builders are responding to builders aren't responding to that builders are responding to what they think the price of houses will be
a year from now
DATE
and that come down and Building and that's what happens when interest rates go when interest rates go up in some ways it makes sense if we're gonna have
Decline
ORG
in economic activity. And it's only the new flow that's being affected Van in Continuous basis That doesn't have any duration to it But I do think we're Chords In the future. With Different parts of the country as I say my best guess is that we will have a meaningful recession In
the next 2 years
DATE
and if so, I think there's considerably more pain with respect to housing ahead.
Larry
PERSON
, we're gonna talk about softness and slowing. We certainly saw that in numbers coming out of
China
GPE
at
the beginning of this week
DATE
. And I wonder what you make of the
Problems
PRODUCT
. Relief the fed here on slowing inflation Probably will it it goes back to the issue we discussed
a few minutes ago David
TIME
about oil prices and grain prices
Maniac Chinese
PERSON
slowing Likely to be How much weight those should be given as we think about our inflation rate In this country but it probably is a positive on inflation. I think the larger questions How we see
China
GPE
in the future and how
China
GPE
will be responding to these economic Increasingly profound events.
Now for some time are looking like increasingly profound events in
China
GPE
It was taken
as almost axiamatic 6 months or a year ago
DATE
that at some point the
Chinese
NORP
economy would surpass the
American
NORP
economy Of total GDP at market exchange rates. Much less clear than it previously was. And I think you're seeing all kinds of challenges for
China
GPE
. There's the huge financial overhang. There's the where the growth is going to come from. There's the growing communist party involve You know, wider range of enterprises. There's the demographic I have been saying for some time that I think people are gonna look back at some of the economic forecasts about
China
GPE
in
2020
DATE
in the same way they looked back at economic forecasts for
Russia
GPE
that were
1960
DATE
or for
Japan
GPE
that were made in
1990
DATE
. One here toward
the end of the week
DATE
turkey central bank made a move to try to combat inflation by you won't believe this cutting the interest rate from
14 to 13%
PERCENT
there's a course as part President
Erdogan
PERSON
's theory of interest rate Practical modern monetary theorist. He is putting modern monetary theory into effect. So far it hasn't worked very well For him Or for the
Turkish
NORP
people I don't think that's going to turn around And I hope that the misguided accolades of modern monetary theory in
the United States
GPE
are watching. Okay Lori thank you so very much this Larry Summersville Harvard are very special contributor here on Wall St week. Coming up we all know getting older makes us slower and grayer but can it also make us rich That's next on Wall St Week on
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Finally,
one
CARDINAL
more thought. Getting old. It's one That we all have to do None of us wants to think about it And sometimes seems like some of the oldest among us may be the deepest in denial where there is Musicians like
Mick Jagger
PERSON
still performing live on stage at
the age of 79
DATE
or sir
Paul McCartney
PERSON
who's still going strong way past that age of 64 he wants worried about Or our political leaders in or nearing their
80s
DATE
like President
Biden
PERSON
and
Mitch McConnell
PERSON
and
Nancy Snapped
PERSON
back at a reporter
10 years ago
DATE
when asked a question. Colleagues privately say.
Like President
Biden
PERSON
and
Mitch McConnell
PERSON
and
Nancy Pelosi
PERSON
who snapped back at a reporter
10 years ago
DATE
when asked a question. Hey In
1984
DATE
provoke the age old or should I say old age question
Democra Only
PERSON
to come back with this zinger I will not make age an issue of this campaign I am not going to exploit Political purposes. My opponents, youth, and inexperience. The world of business and finance is an entirely immune from this but by
Warren Buffett
PERSON
who at
91
CARDINAL
shows no signs of stepping down and told our own
David Rubinstein
PERSON
his goal is to keep Do I like to be the oldest man that ever lived actually And who knows maybe we don't really just get older. We get better. Was hoping that that may just be true. We now have a concrete, provable example, coming from the world of golf, where a journey and tour professional who'd struggle for
years
DATE
, suddenly became Simply by turning
50
CARDINAL
pushing him into Older player PGA tour champions league To be sure
Stephen Alker
PERSON
from
New Zealand
GPE
happened to be at the very top of his game when his birthday came around but according to
the Wall St Journal
ORG
adding that extra year has let him In
1 year
DATE
$
three
MONEY
.
5 million
CARDINAL
which is more than he made in all the rest of his career put together And if he keeps sinking extra long putts like he did to win the
Boeing
ORG
Classic
PRODUCT
. He may just be getting started. That does it for this episode of Wall St Week. I'm
David Weston
PERSON
. This is
Bloomberg
PERSON
. See you
next week
DATE
. Tag on the product may read made in the
USA
GPE
but Made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
Sacha
Nadela IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mehotra
PERSON
and that's
Indians
NORP
running companies all over the world. Have so many
Indians
NORP
risen to the top. Incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a Crypto You have a world of young people. That was.
Actually find their way to the sea sweep. Crypto Have a world of young people. That want their own financial system. And their own culture. And it is very powerful And I'm a big believer in it. The iconic
American
NORP
car company
GM
ORG
is in the midst of a dramatic transformation. We really feel general motors is moved from being an automaker to really a platform innovator. Middle of this decade and to phase up production of all gas powered cars and trucks by
2035
DATE
With
ED
PERSON
penetration still in single digits it's a bold bet on the future of mobility Shift to electrification and ultimately autonomous vehicles is probably The most transformative Thing that's happened in the auto industry maybe since
Henry Ford's
PERSON
assembly line. It's monumental. We've got an industry that's it's really stayed about the same for
about 50 years
DATE
the thing is different now we've got a confluence of what we call case connected to ton of shared and electric that are really new things in a quantum way to the industry That's where
CFO
ORG
Paul Jacobson
PERSON
comes in With finances really being too full number one is making sure that we're supplying the information on how we think those decisions and that transformation are gonna project out financially and then number
two
CARDINAL
is make sure that we get the right resources in the right place at the right time which can be challenging with so many different directions and so many opportunities ahead of us. He's Rather additive business Focused on tech. It's a focus. A company that's focused on revenue diversification and with that, there's a lot of margin expansion up ahead. You gotta be optimistic about the future, making sure that we're allocating capital into the right places to fund the transformation. For
90 consecutive years
DATE
general motor
ORG
sold more vehicles in
the United States
GPE
than any other manufacturer that streak ended in
2021
DATE
when
japanese
NORP
rival
Toyota
ORG
took the crown Still recorded record profits in
Paul Jacobson's
PERSON
first full year
DATE
as
CFO
ORG
and that's a good financial foundation for the task ahead. Are there any reds on that dashboard? Well, I think we live in a world that seems to be red for everybody, right? That's been one of the one of the challenges. I mean, since I arrived here
a year and a half ago
DATE
, it's it's really been about the semiconductor challenges, the macro economic challenges, supply chain, etcetera. But That is just part of transformation, right? Not everything goes according to plan and you just gotta make sure that you set your sights on the horizon and make sure that we continue to track to it. I think the team's doing an extraordinary job. There's a lot of uncertainty out there and that's one of the things we have to manage. We're blessed with a tremendous balance sheet. The team's done an amazing job. Funding the pension, paying At which puts us in a position where I don't actually have an aversion to using the balance sheet to continue on our path if we need to temporarily Cheap shortages in supply chain disruptions have driven global car sales volumes down from their
2018
DATE
peak but it may have long term benefits forcing companies like
GM
ORG
to tear down silos and bring teams together to find solution We actually is a management team all the senior leaders of the company get together once a week and we've been doing that for
a year and a half
DATE
to talk about here's what the forecast is here's what we're gonna do to mitigate it and here's how we're gonna respond and it's been one of the most amazing Examples of collaboration I've ever seen in in my career.
Here's how we're gonna respond and it's been one of the most amazing examples of collaboration I've ever seen in in my career. Functional leads or vice presidents that would lead a product development or design or sales or marketing or whatever that is You know, it's really, it's really, everybody's together. Our staff meetings are together. It's very, very much one team. And that's changed everything. We've already talked about how we are simplifying the chip And going to
three
CARDINAL
chip families that's gonna put us in a position where we're not as
beholden
GPE
to
hundreds and hundreds
CARDINAL
of chips depending on which vehicle where any one of them might hinder production. So, lots of things across the horizons that we're doing to make sure that this becomes much, much easier to navigate in the future. The Global demand for metals used in batteries is already putting pressure on supply chains and driving costs higher. Now commodities prices for those That are like lithium like cobalt that are used in
EV
ORG
batteries
Sword
GPE
. Those materials also not are just expensive. They're generally in places that are have geopolitical issues. How do you address the things like lifting up and things like nickel. There's gonna be a shortage of how do you make sure you have that at a price could afford so you don't have a rapid spike up in the price. We're really looking at a multifaceted approach. Anything from traditional supply chain procurement type functions all the way to joint ventures or Term contracts. It's not about capturing the best price
today
DATE
. It's about capturing that consistency of the business model that we can plan around and anticipate going forward to make it easier to to fund this transfer. But while
Jacobson
PERSON
takes steps to head off headaches use also aware that
Jim
PERSON
's electric future holds huge I think the most exciting thing about the
EV
ORG
transformation is it's fundamentally gonna change the way we make money in general motors because if you think about it the overwhelming majority of our profits come from the time that we sell a vehicle to a dealer right and and that vehicle enjoys a lot of revenue for very different companies over the Of other on the road. Electric vehicle and what connected vehicles are gonna do for us and is increase the revenue opportunities for us over the life of that vehicle
second
ORDINAL
owner
third
ORDINAL
owner
fourth
ORDINAL
owner because we're gonna be able to offer ways through over the air updates to customize it subscriptions various services insurance packages lots of different ways that we can interact with the customer in Historically, we haven't been able to. How much of your top line total revenues gonna come from selling vehicles as opposed to the services that you've just been describing? So, if you go back to our investor day
last year
DATE
, we talked about doubling our revenues while expanding our margins by
2030
DATE
. The doubling of the revenues are coming both from growth and auto Because there's a big overlap and we're getting new customers
every day
DATE
on electric vehicles the ones that were taking reservations in orders for right now so what we talked about is
20 to
QUANTITY
25 1 billion dollars
MONEY
a year of revenue In
2030
DATE
around these services that we can provide going forward so it's a massive growth off of what we've currently experienced with
OnStar
ORG
historically and really excited about what that's gonna bring. Also expects significant growth to come from cruise. It owns
80%
PERCENT
of the startup that's developing autonomous vehicles. Despite considerably investment in advanced technology, the company has resisted the temptation to spin off these units so far. Is there a world can you envision as the chief financial officer a world in which you say you know it there's an old businesses and new business we should trade separately well there's a lot of commonalities between the business
About 70
CARDINAL
to
80%
PERCENT
of the vehicles are the same, right? They both need brakes, they need windows, they need features, inside the vehicle seats, etcetera. So, Everything that we can do to make the ice vehicles more efficient and more appealing to the customer is only gonna help us with our
EV
ORG
transformation and that's why that integrated approach is so critically important to help fund that journey for us going forward. Since
July 2020
DATE
shares of
North American
NORP
automakers have significantly outperformed the
S
PRODUCT
and P 500 even
S and P 500 even after broader economic and geopolitical turmoil drag them down from their peak Across the industry and a lot of that rewarded by Wall St. The companies will now need to deliver on be prepared to deliver on that in a post supply chain world. A part of your job is to make sure that a wall street is getting the message that you want them to have about general motors. Where are you in that right now? Where is general motors in the perception on Wall St Accent to which it really is a tech company on the forefront. Yeah I think the challenge with what we did is we pulled out
10 year
DATE
goals that something that was kind of unheard of in the industry as well as as here at
GM
ORG
and now what we've gotta do the next phase is make sure that we're giving a road map to investors out there to say here's what you can expect to see in
the next 2 to 3 years
DATE
and as you see that you should increase your confidence that On the journey to get where we need to be in
2030
DATE
.
Monthly
DATE
which is fine. As we produce an execute the confidence will grow Nothing is going to to take us off track from that execution. We know we have the right strategy. So, that will come. This is about the long term. We're not running the company for the stock price
today
DATE
. We're running the company for value creation over the long term and I feel like we've got a really really good hand to play. Coming up
Paul Jacobson
PERSON
tells me what he's learned about
GM
ORG
's electric future from driving the brand new
Hummer EV
ORG
. It's taught me number one you know what what are the concerns of the consumer that are ultimately in the driver of vehicles and then number
two
CARDINAL
where do we need to focus on addressing some of those anxious points for people and we visit the lab where
today
DATE
's investments are developing
tomorrow
DATE
's batteries
Chemistry
ORG
and say this is superior but can you replicate it
millions and millions
CARDINAL
of times across the entire portfolio
Bloomberg
PERSON
. Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. I'm
David Weston
PERSON
. We think that's the next secular shift from businesses most influential and instrumental yes it's about renewables This is a level of uncertainty that we haven't had to deal with. General motor CEO
Mary Barra
PERSON
and President
Mark Royce
PERSON
are not only auto industry veterans their
second
ORDINAL
generation
GM
ORG
employees following fathers who both worked at the company
Paul Jacobson's
PERSON
new to the car business he launched his professional career at
Delta Airlines
ORG
including
7 years
DATE
as
CFO
ORG
before joining
GM
ORG
and
December of 2020
DATE
I started with
Delta
LOC
back in
1997
DATE
as a financial animal instead of business school and just had an incredibly blessed career there to be able to see and do so much and got to be treasurer through the bankruptcy which as a corporate finance person bankruptcy is
Just had an incredible blast career there to be able to see and do so much and got to be treasurer through the bankruptcy which as a corporate finance person bankruptcy is the best experience you've never hope to repeat but it gave me a really good platform and how to make deals and how to think strategically across the board.
Mark Royce
PERSON
appreciates what Customers whether it be designed whether it be the actual vehicle of an entry itself the experience in buying experience at the dealer whatever that is you know committing Proven to be a perfect partner for that. Company that is
100%
PERCENT
focused on customer service and I had you know the opportunity to learn from
Richard Anderson
PERSON
and then
Bastion
ORG
on the finer arts of of leadership and and transformation and through a company that went through a lot here is very very different working for a manufacturing company is I I tell my wife all the time it's just It's amazing to be around people who build things.
GM
ORG
's transition to an all electric future is built on a proprietary battery pack called
Ultium
GPE
. It's building
four
CARDINAL
factories to produce the batteries while it retools
four
CARDINAL
existing The objective to create a scalable platform that eventually drives down costs called
Jacobson
PERSON
took me to the laboratory where this technology is taking shape So we're in the heart of
one
CARDINAL
of our battery testing labs where we test all aspects of the battery resiliency hot extreme temperatures shaking vibration etcetera So we are investing a ton into battery So around us we've got the testing We're also building a new manufacturing cell manufacturing test facility. We're gonna test different ways of manufacturing cells cuz it's
one
CARDINAL
thing to look at chemistry and say this is superior but can you Millions and
millions
CARDINAL
of times across the entire portfolio. So, we're an execution mode. We're producing cells now at
Lordstown
GPE
. It will be rolling those out soon. We're already have these cells and the
Cadillac
ORG
lyric as well. But as far as
Chemistry
ORG
goals. I think we're just a kind of the beginning of where where that might go over the long term. Do we go to solid state? Or or what? So, we're looking really at a portfolio approach to make sure we capture the Probability of being successful. So, as you go to scale, you have those millions of millions of time. The vehicle comes off the line, whatever that is. In the future, right?
10 years
DATE
down the road. What percentage of the cost of the vehicle will be just Well the battery and the motor systems are sort of the equivalent of the engine and the transmission today It is it is costing more obviously for for those systems going forward but we think that technology is gonna come Overtime as well which is why we've said we think we can get an electric vehicle to parody profit parody if you will by
the end of the decade
DATE
with their ice counterpart. EB's may also be more profitable on the labor side at least in the manufacturing phase. Parts that are different in a nice versus about There's
40%
PERCENT
less labor hours
TIME
in the in that the assembly of a pet Fundamentally there's
40%
PERCENT
less labor needed. Command a premium. We're seeing auto companies on the engineering side The marketplace competing for engineers that they're competing with video game companies so silicon
Valley
LOC
companies a different kind of engineered software engineers are you know really needed There's this big competition for back kind of Employee and and attracting them to the auto industry which is in considered you know an old rust help industry We've been hiring really aggressively over
the last couple of years
DATE
in software in chemistry in in just broad engineering across the board and what we found is people are attracted to
Couple of years in software in chemistry in in just broad engineering across the board and what we found is people are attracted to coming to If I think more and more
today
DATE
employees are focus I wanna work for a company that shares my values. And when you look at what
GM
ORG
is doing in our pivot through electric vehicles. We find a lot of people wanna be a part of that.
Us
GPE
car buyers are also getting with the program sales of fully electric vehicles group by
85%
PERCENT
from
2020
DATE
to
2021
DATE
with Tesla accounting for
three
CARDINAL
of the five top selling models Might be the biggest. Think of the reasons why people avoid an electric vehicle now
Four
CARDINAL
of the top
five
CARDINAL
reasons are related to chart Charging infrastructure is steadily improving but consumers still worry about being stranded without power on road trips
Paul Jacobson
PERSON
assured me that when he takes the new
Hummer EV
ORG
on long journeys it's not just fun to drive it's equipped to go the distance I hear so much about road trip anxiety that I wanna do experience it myself my family likes to drive a lot so I brought my daughter home from college in this and and it was great I mean the computer system is all intuitive it tells you how to keep track of the battery it tells you where the charging stations are it tells you how much power you'll have when you get to the charging station so it really puts But as far as driving it, it is, it's a treat. So, where are you on the charging stations? I know general owners has made an investment and
one
CARDINAL
company. How are we doing in this country generally and getting charging stations in? So, I think this is this is an area where obviously we can we can To improve as a country in a society. We're doing our best. We've committed almost a
one 1 billion dollars
MONEY
to
EV
ORG
charging. So, we've we've taken that and looked at home charging solutions, local community solutions, and road trip charging solutions. What? You know, with my daughter, what we would end up doing is
Plugging
ORG
it into a charger usually a high speed charger. To get as much charges as we can. And being there for
20 to 30 minutes
TIME
. Get us a lot of range and by the time we've used that range, retired, ready to stop
Etcetera
ORG
. So, it was it was a really good experience for me and it's taught me number one, you know, what what are the concerns of the consumer that are ultimately in the driver vehicles and then
number two
CARDINAL
, where do we need to focus on addressing some of those anxious points for people? Up next the battle for
EV
ORG
supremacy maybe one or lost in
China
GPE
call
Jacobson
PERSON
thinks
GM
ORG
is ready to take up the challenge World is competitive, right? And and the world of electric vehicles is only gonna get more competitive. It doesn't matter where you're operating in. He reflects on how the role of the
CFO
ORG
has changed over
the years
DATE
.
Today
DATE
's
CFO
ORG
has to be much, much more than a bookkeeper. Has to be a strategic business partner at the table, helping to see around corner, and helping to prepare the organization for what could happen. This is
Bloomberg Ken Griffin
PERSON
is moving both sit it out and send it all security is to
Miami
GPE
the scooper's broken by
Bloomberg
PERSON
's
Amanda Gordon
PERSON
When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. Katrina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. Roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement? To help reduce the emissions from these well stocked maritime behemoths. In
2021
DATE
.
In
2021
DATE
despite COVID lockdowns and supply chain breakdowns general motors delivered near a
three 1 million
QUANTITY
vehicles in
China
GPE
and since
China
GPE
still taps the global market for electric vehicles
Introduces
ORG
new
EV
ORG
models.
China
GPE
's role frankly is is a big role in big volume for us and all of our brands and as the landscape changes really rapidly to EVs in
China
GPE
. You know, we're ready. We've got great JB partners. We do own the brands in
China
GPE
and so we've got, you know, good brand representation in the Vehicle and then also we've got the flexibility and something like our
Ultim
ORG
architecture for batteries and cells that is flexible enough to handle the requirements of of a prismatic cell like CATL makes in
China
GPE
Favor some companies over other companies is that a risk potentially for
GM
ORG
because you have some
Chinese
NORP
native companies where I can put that way like a BYD we believe we're in a good position At
the end of the day
DATE
, the world is competitive, right? And and the world of electric vehicles is only gonna get more competitive. It doesn't matter where you're operating in. So, we need to focus on the quality and the customer offerings that we have. In regardless of which market we might be There's
one
CARDINAL
thing everyone agrees on when it comes to selling vehicles in
China
GPE
the future is extremely difficult to project
China
GPE
's been interesting because you know they had They shifted and sentives from being a consumer based incentive to being a stick On the industry with trading such that's greatly favored Start up. And it's been harder for the traditional automakers both domestic and the western automakers of foreign automakers there in terms of the the subsidy and the this stick and carrot Forward in
China
GPE
as to what
China
GPE
looks like in
2030
DATE
.
Paul Jacobson
PERSON
tends to view the future with a healthy blend of optimism and pragmatism I asked him to look ahead at some big picture issues. Over
the next 10 years
DATE
excites you the most about opportunities for general motors. I think the most exciting thing over
the next 10 years
DATE
is we don't know about all the opportunities to generate revenue and serve the customer. So, I'm really excited about that. Okay, what are
the next 10 years
DATE
? Make sure most nervous. I'm not sure if it keeps you up at night but heads in that direction. Yeah, I think the thing that keeps me up at night
The next 10 years
DATE
is just thinking about the macro landscape. The world has just changing so rapidly. We have a lot of competitors coming at us and you know, we're gonna meet those challenges but we don't know what the world's gonna throw at us. We gotta make sure that we are very nimble We've talked a lot about the changes coming for general motors as you look at your job and see if how will that job have to change because of those changes in the move to
EV
ORG
's. Well, I think as as you think about any
CFO
ORG
not just the moved EVs but just the move We don't have time to look back over what happened
last year
DATE
or
last quarter
DATE
. What happened
last week
DATE
? What happened
yesterday
DATE
? How's the business performing? And how do we get real time information to the business leaders? Over the time that you've been to
CFO
ORG
what has changed most for you what skills have you had to develop Well I think you know as as as I'll see if I was experienced you get you get much much more ingrained into the strategic side As I said
today
DATE
's
CFO
ORG
has to be much much more than a bookkeeper. Has to be a strategic business partner at the table helping to see around corners and helping to prepare the organization for what could happen. If somebody took the job to see if I at some company
today
DATE
what would you advice them number one is listen right I I think too often see if those are are there and their view is the people are there to send out Right I I like the challenge our team to how can we find a creative way to say yes how can we find solutions and ways to make things more efficient not just for goats
They're the same now. Right? I like to challenge our team to how can we find a creative way to say yes? How can we find solutions and ways to make things more efficient? Not just forgo them. In
Louis
GPE
something else. That can sometimes be hard for us. We're all naturally skeptics. That's what tends to do attract people
Finance
ORG
business. So, how are you skeptical with a good vent towards it to helping people accomplish their goal? Finding creative ways to say yes if
Paul Jacobson
PERSON
and his team can do that
GM
ORG
will be well on the way to delivering on its grand vision of transformation I'm
David Weston
PERSON
Is
Bloomberg
PERSON
In
the coming months
DATE
do you see that coming true Resources from
more than 120
CARDINAL
countries
24 hours
TIME
a day.
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. There's an old saying in finance that cash is king but when it comes to payments the data suggests that no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of interest in
But when it comes to payments the data suggests that it's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in person transactions around the world Came and send it straight from the beginning cuz has really focused on getting To use electronic forms of of pain. In fact, if you look at like the
US
GPE
, for example, Basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic just about
every single year
DATE
. So yes we are moving towards the cash flow society A new technology is promised to kick these trends into a higher gear. The terminal on the till of the merchant. Depending on how old one is. One is used to that. At least then and the developed world. That is not everywhere but every one has a phone So electronic payments can end up in a super simple way and everybody's hands and for our business that's a massive growth of opportunity
MasterCard
ORG
is already seizing that opportunity. After In
2020
DATE
revenues shot past pre-pandemic levels in
2021
DATE
driven by a rebound consumer spending. See if
Osach
GPE
and Meher knows that this boom is likely to fade. And he's set on finding ways to keep the momentum going. Being successful in this kind of environment is to have a diversified portfolio. You gotta be nimble from an expensive standpoint. You gotta be very disciplined. As a finance officer, what I've gotta do is I've gotta make sure that we are investing in those resources Which are currently in demand from a customer standpoint but at the same time not losing sign of the long term. CEO
Michael Niebach
PERSON
counts on
Mayro
PERSON
to do more than just oversee the balance sheet. The top line for me is
Visor
PERSON
and confident. Conciliary. Yes. You know in the past it was more of a function of you know let's make sure the numbers are good let's make sure we get a great control environment let's make sure we're actually able to close the books on time let's make sure we've got The financial elements of the business in order. The job of the
CFO
ORG
in in our view in my view is a function of making sure we're creating the right linkage. What the purpose of the businesses, what the strategy of the business is, Delivering on the financial returns for the company all while driving long term shareholder family. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplishment of the strategy of the company
Mastercards Corpus
PERSON
is no surprise cards. Carded products currently account for
over half
CARDINAL
the company's revenue. The company said ambitious growth targets it as
2021
DATE
investor day. Committing to expand this core and to diversify beyond it. We've been on a
6 year
DATE
strategy to be a multi-rail company in plain
English
LANGUAGE
that means whichever way you pay people enable that despite the fact that card is in our name it's essentially any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta Not only where the consumers today but where they're gonna go because a lot of what we've gotta do takes time to implement. And is it difficult you'll get some you'll get it right sometimes you'll get it wrong sometime but hopefully you're getting it right more often than you can get wrong and you're working with through that. Forecasting preferences is complicated by an uncertain economy consumer confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis for
Mastercard
ORG
in its peers. Free to watch people often perceive I think famous as an industry it will be quite resilient in downtown Generally speaking Even during.
Even during a recession, the amount that consumers spend actually does not go down. It continues to grow. I think the thing that people are worried about more in the payments industry is kind of how does the mix of spending change? The
first
ORDINAL
thing is that typical
Happens
PERSON
if you're going into a session in the moment is people tend to pull back on discretionary galleries or spend they move into the non discretionary categories of spare. Pivot into food. They're pivoting to rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which rang debit and credit are exactly the same. The technology is the same. The distribution models the same. So those those areas don't necessarily change by virtue of moving into more for debit or credit.
One
CARDINAL
area that master card has been moving vigorously into is
BtwoB
ORG
payments a market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
Tremendous promise and the
BWB
ORG
area the card business as in the the elements of the B to B space which are served by cards. Are doing well. Are they doing very well? And it's in the small business space and the mid market. It's in the large corporate space. All of them do really well. On the accounts people side I would say we're in the build fees. And Whereabout building and open loop environment to enable payments on accounts payable rails. Where is the opportunity in that space is? Different to consumer payments where there is a global standard the global standard is
MasterCard
ORG
the global standard ah card payments because that's been established that is in quite established that and be to be And I think the more benefits we bring into the payments that are easier than just making a really complicated cross border payment I think we'll find our way there and we're gonna see and explosion of creativity a lot of other companies Pursuing new opportunities takes capital
Mastercard
ORG
has spent
billions
CARDINAL
acquiring companies that add capacity and diversified its infrastructure
Acquisitions
ORG
and partnerships have helped mastercard offer more value added services to their clients tapping into a lucrative revenue stream What we call services which includes data insights consulting manage services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company. Wow. Yeah. So, it's not insignificant. So, often times, people think mask department think god. Very important but there's a very different part of
Mexico
GPE
as well. From a balanced perspective,
MasterCard
ORG
has maintained a healthy leverage ratio even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. We don't go in and say, well, right now, valuations are lower than they were
a year ago
DATE
. Let's go Something. That is, that is an opportunistic approach and doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint What are inherent capabilities we as a company have What are the gaps in order to capabilities to meet that strategy and then follow those gaps is the best to build Or partner. We're out there and we're trying to find the right companies together and it's gonna make sure that we have a clear view on short and long-term synergies and so forth. And to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
MasterCard
ORG
's capital allocation strategy. It's included
annual
DATE
share buybacks and steadily increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus share buybacks and dividends because master parties traditionally had rob Program in rewarding shareholders. Right.
First
ORDINAL
call of capital is towards growth of the business After we have done that it's about making sure we're being good towards the capital and returning excess cash to shareholders with a bias towards shareby backs And then once you start to come to say I have dealt with my strategic priorities I either have invested in my organic growth or in acquisitions then access cash we will return back Buybacks over dividend because it gives a small flexibility but that's been a good model for us. It's been working well and it's been well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not What it's really beautiful.
By the market Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not What it's really made a difference on has been in terms of how it's driving a shift from cash to the payment particularly on the small ticket items and later how
Card
ORG
is staked out of place A cryptocurrencies. In the crypto world we play the role as an on ram. This is
Bloomberg
PERSON
.
Bloomberg
PERSON
brings you the headlines
first
ORDINAL
. The
first
ORDINAL
time next on every top and bottom line metric apart from one. It's really a story of strength. Plus, expert analysis to keep you informed. Is concerning. Indicates maybe a recession is coming. Bounce back coming in
next year
DATE
. Such a mirror joint mastercard is group executive in corporate treasure in
2010
DATE
over
the next decade
DATE
he took on several different roles before being appointed chief financial officer in
2019
DATE
that's a very different path than the one he started out on Hey undergrad there I worked with the family business there it's a textile business which my grandfather started and my dad my uncle took over and then my brother and I got into and I worked with him for
three and a half years
DATE
then I came here for business school. The moment of truth came on graduation day. My dad got on the phone. My brother was older than I am went to business school as well and went back home and worked with my dad. Got on the phone. Congratulated me and said,
Susan
PERSON
, what are you gonna do with your life? And I'm going, well, why are we having this discussion?
Dad
PERSON
wants me to come over and work with the family business. He's like, yep, that's what dad wants you to do. Hey give him a chance I'd love to work in finance in in the
US
GPE
. Mary took the chance even though it took him
6 months
DATE
to land his
first
ORDINAL
job at
General Motors
ORG
where he worked for over a decade. Then it was on to the energy industry it has Before finding his way to
Mastercard
GPE
.
Today
DATE
my dad couldn't be prouder of the fact that you know I chose the path I did Obviously he misses the fact that we're not there as a family but that's just part of life right we all gotta grow in
Blossman
GPE
groom Accepted at the beginning. Took him
all 30 minutes
TIME
to get there. Campus it's clear that is Well, more important, more fun stuff. What's the plan for
the weekend
DATE
? And of course the cafe provides a demonstration of the tap and go technology that's changed the game for payment companies Could I just go to regular coffee with help please? Yeah. Okay that would be
571
CARDINAL
. You got it. We're gonna make this work. There we go. I think contactless is a very powerful catalyst for accelerating In
the last 2 years
DATE
what we have seen in the
US
GPE
is god penetration guru treat
annually
DATE
has doubled What was
the average 5 years
DATE
the pandemic was one of the reasons people didn't want to touch E-commerce purchases, the contact list definitely contributed to this. It's really made a difference what it's really made a difference on has been in terms of how it's driving a shift from cash to that
24
CARDINAL
payment particularly on the small ticket items Really, really important cuz at
the end of the day
DATE
, our model is as much about converting the dollar value of the spend as it is about the number of transactions we can get over our network And even though it happens to be a $
two
MONEY
transaction, a transaction, a transaction on which we make revenue. On which we can deliver services and that's really important
MasterCard
ORG
introduced
PayPal
ORG
it's
first
ORDINAL
contact list payment system in
2002
DATE
but the technology took some time to gain traction I would say we post invested in this many many many many years ago the adoption rate on this in the early part even in markets like
What's the next one I think
Smile
ORG
. Biometrics I think that's where it's gonna go. I think we've reached that point of people are sick of too many passwords. People are sick of typing in stuff and there's also too many wallets and other ideas and stuff that is around. Everybody has a smile. So, just play with your smile. There you go. How much are you investing in that? How quickly do you see that becoming the next tap and go? Yeah. So, look, I think this is gonna take a while. These things haven't adoption go which typically is fairly flattened the early part and then you start to see some level of skiping.
Mastercard
PERSON
's next breakthrough may The company has opened innovation centers in
Australia
GPE
,
India
GPE
,
Europe
LOC
,
Canada
GPE
, and
the United States
GPE
. These are Where we draw in customers where we draw the local community. We have them in big cities where the latest technology is the players are all around us. In
New York City
GPE
, it's in tech alley and everybody in the tech industry is around us. It's a point where people wanna work and be attract the best talent and we go and this brings us back to the
CFO
ORG
. We go So how are the revenues looking? What is generated from new products? What do we see? Is there real momentum? Is there real growth? And if you overlay that and link that back to our tech hubs in these regions where we have them clearly that is what driving what is driving our new solutions. Woman investment standpoint we try and make sure we've got our foot in the door and all of these new and emerging technologies cuz what we don't wanna do is play favourites with
one
CARDINAL
versus the other we wanna make sure we're investing just appropriate amounts of money to have skin in the game to know that if this thing has got legs to it we wanna be at the inflection point for them to In your tech hubs can you act like bond
James Bond
PERSON
what are the queue movies and like the laboratories we walk in and they you know you sort of face off and clear the system and they serve to this Revolution this company who can do that now everybody No that's not me Coming up how master card has embraced the brave new world of cryptocurrency with all its ups and downs. So long as we follow our principles we think we're in really good shape. In such an mirror tells me what advice he'd offer a
CFO
ORG
just starting out in the job. I think it's important to stay calm. I think it's important to recognize that change is going to happen. You can't fight change. This is
Bloomberg
PERSON
. Back in
1997
DATE
I was interested in the following question which is there are a bunch of the dinosaurs called
Sorapod Dinosaurs
PERSON
which had really long skinny necks so apostoras is an example Also really long skinny tails. So, I made a computer model that showed that in fact the tale of these
Sorapod
NORP
dinosaurs could actually act like a whip. A bullfit. There's a way of bullet makes that cracking noise. Yeah Is because the tip of the whip actually goes about twice the speed of sound. Okay. And that crack is a sonic boom. Yup By making loud booms. Over
the past few weeks
DATE
has made it clear. It wants to go higher. It got a little spook by the idea that due to political potential Like many of its counterparts and the payments
Like many of its counterparts and the payments and financial services industry Artist developed products and partnerships that bring cryptocurrencies into its networks. From the payments and payment system perspective the the Players and and members that make up that ecosystem are really agnostic. To them, crypto is just another current literally. Just another asset. Point Still so small. Very early If I'm a hard company it's better to invest Partner with some of these companies for future revenue growth rate versus kind of sitting on the sidelines.
Crypto
ORG
is a term that encompasses a number of different projects including central bank digital currencies and private sector stable coins. Also, digital assets like bitcoin. He's volatile valuations is acceptability to fraud. Have raised plenty of anxiety among investors.
MasterCard
ORG
's long-term plans to stay in the space haven't wavered. We're not really in the crypto hype of investment investing around could we like the fundamental technology and the promise that it brings to solve problems that have not been solved so if we see more revenue coming out of B to B solutions that leverage blockchain technology for example. Tokenize the bank deposits. You know, just to throw out
one
CARDINAL
example across border payments, whatever it might be. In the crypto world, we play the role as an on ramp. So, people use mask card products to buy crypto. Our debit card products. So, that's the on gram If people wanna spend money as in fear currency to buy crypto and react as the off ramp and the offer ramp is when people want in cash should We help them actually gain access to be able to use their crypto balances everywhere master cuts accept it we engage with central banks on central bank digital currencies we engage with governments on how a policy could look like how regulation could like look like Engage with the startup community and say come on in let's sit around the table in
one
CARDINAL
of our tech hubs and be discussed what what solution actually is needed by whom and how we can bring it together they have the greatest idea but the greatest idea it's a path to scale that's what we can bring is there a potential liability because of volatility because of Bitcoin and certain other cryptocurrent currencies have been painted. Is there any liability for
Mastercard
GPE
? Yeah. Well, too long as we follow our principles, we think we're in really good shape. And the principles we care deeply about our Stability as instability of the currency in question Point number
two
CARDINAL
it must meet consumer protection requirements. It must meet the laws of the land. And this is not new news to us. We've done this in the space for
the last 50 years
DATE
. For everything we've been working with regulated financial institutions on. And so which is why when we got into the space the first thing we did was to find principles and we will keep abiding by the principles and what we do. I feel happy because we're in the discussion Was shaping that ecosystem And then 1 day it'll look like we'll be having done in many other spaces over years of
the past years
DATE
. Strategic and financial decisions that shape the business. I wanted to know what he sees when he looks ahead. What's the opportunity for
MasterCard
ORG
in
the next 10 years
DATE
that most This still remains a very sizable consumer payments opportunity Stand very well poised to actually capitalize on. This is the trend of the shift from cash to electronic forms of payment. If you think about it globally, there's still
a ton
QUANTITY
of cash. Which remains to be electronified. And that that opportunity is huge. The
second
ORDINAL
pillar for me is around
Identified
ORG
over
the past few years
DATE
a sizable total addressable market in what we call new payment flows.
Bucket
PERSON
number three
CARDINAL
is around services. It goes back to our insights, analytics, our broad management capabilities, and everything we're doing that space. And then the last piece around you networks. Which is around open banking and digital light entity. What are some of the challenges for
Mastercard
ORG
over
the next 10 years
DATE
that keep you up at
night
TIME
? On what's going on for my technology innovation.
Thank you and digital entity. What are some of the challenges for
Mastercard
ORG
over
the next 10 years
DATE
that keep you up at
night
TIME
? Locked in on what's going on for my technology and innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction we've got to engage with people who could potentially be Mediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
number one
CARDINAL
. Number
two
CARDINAL
is Look I mean the world is getting More and more into a regulatory environment where regulation regulators are playing a bigger role. Nationalism is playing a bigger role. It's important for us to continue do everything we're doing by being deemed local. It's important to be a global company but be deemed local and that's gonna be important for us to execute on. At
the end of the day
DATE
, sitting in my role is the
CFO
ORG
. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do every day. What's the biggest change that you see a role having over
the next 10 years
DATE
? Predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on making sure Leading from the front on executing but also failing fast and that's where a
CFO
ORG
can play a big role And by that I mean You're not always gonna win. There are things you're gonna do. Hopefully you get more right than wrong. But recognizing things which are not working out. And making sure you actually feel fast on them and get out of them. Because you can get you can fall in love with stuff. Keep doing it. Keep wasting resources. Don't need realise that it's not gonna pay off. And I think the emphasis around that is Only increase for that. Capital resource environment. What advice would you give a
CFO
ORG
today
DATE
? Hey I think it's important to stay calm I think it it's important to recognize that change is going to happen you can't fight change What really matters is how you can get up and actually deal with that change. That's super important for a
CFO
ORG
. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. I noticed I've said nothing about financials and I've said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are table sticks you've gotta make sure that stuff happens you gotta level technology you gotta drive efficiency in the building you gotta get the numbers right you gotta have a good controlled environment so what's gonna call you apart is the is the other elements which I spoke If
MasterCard
ORG
can meet ambitious goals for growth in its core business
Deserve
PERSON
a lot of the credit. This is
Bloomberg
PERSON
. At some point you had to fight for the trademark right for
the Red Soul
PRODUCT
. Yeah. Is that stressful? Very stressful. Very stressful. You know I'm We are a small company in a way and to have to fight people who have those huge companies who put you
27
CARDINAL
lawyers on your back or something which is yours is very stressful. I mean, I wish it's I wish you didn't talk but Hey I'm happy about But it's done. Realize that the time when you start the company that you would become so successful Actually so big. No you know when I started the company I wanted to have a shop in
Paris
GPE
which is my hometown and I wanted to do pretty shoes for pretty girls that was my girl I know you look back and you say actually I still made pretty shoes but for many more women. Yeah. Absolutely. Do you think you would have So successful without the red soul. To my work but also to the fame of my
So successful without
the Red Soul
LAW
. To my work but also to the fame of my shoes because it's instantly recognizable but then you know the design is very important but definitely when you have such a strong sign of recognition you Based to yeah. Big expensive cities have a lot going for them but if you live in one you probably notice that these big expensive cities keep getting more well You could always move away So, there's really nothing keeping you there. But then again, moving is a hassle. Well, what if someone paid you 10 grand to do it? What if they threw in free office space? A bicycle or a gym membership
Programs
WORK_OF_ART
and cities and states around the
US
GPE
are doing exactly that and they're Lot of interest. We've had
over 50 1000
CARDINAL
applications
about 90 1000
CARDINAL
applications. We've had over
1800
CARDINAL
applicants from all over
North America
LOC
. So are these nation programs actually beneficial to their communities and the workers joining them or are they little more than flashy advertising campaign Places looking for an injection of fresh talent. When
US
GPE
inflation numbers are released Terminal speed. People are going full risk on. When do we get back to boring inflation? What is your base pace for
Italy
GPE
in terms of what happens Global economy is changing as the world recalibrates.
Japan
GPE
's leaders are forging a more innovative and sustainable path forward to revitalize the nation
Giants
ORG
policy makers and pioneers tell us how they're doing just that.
Every week
DATE
on
Japan
GPE
ahead right here on
Bloomberg Television
ORG
. So Life you're the CEO of Roblox but on Roblox you're builder man. You know that name we just started up
2 weeks
DATE
after we launched and we're all picking our own usernames Everyone picked one I just said Since
2004
DATE
. That's right. That's awesome. Do you still play? I wish I could play the whole day. I have to be a CEO. So, how often do you play? I'm probably on it every day but not as much as I would like. I have
four
CARDINAL
kids. I have a
nine-year-old
DATE
son who's on Roblox a lot. He said, his favorite games are the Tycoon games. Oh, lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory I have
four
CARDINAL
kids. Oh, you do. Yeah. They've grown up watching me do this. Yeah. Another, they're pretty savvy, social media people, but I'm optimistic someday. They're gonna be using
Roblox
PERSON
for some other reason. Like communicating or more working or something like that. And then they're gonna be, oh gosh, it's like
Forest
PERSON
to be on
Robox
GPE
. It's a Port Monto of robots and blocks where users can build and play games in a 3d world. Roblox has boo into a global online gaming juggernaut that Are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact roblox was building the metaverse long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. But what does the future metaverse really look like and how do we cultivate a civil digital society within it?
Long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. Really look like and how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co-founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. I'm a mom and so I'm been really excited. To have this conversation. For parents and anyone out there who still doesn't quite What exactly are kids doing on
Rob Yeah
PERSON
kids on Roblox aren't just playing. They're learning. They're hanging out together. Can't be together in real life. They're hanging out on roadblocks. They could be playing hiding goes sick. They could be pretending they're running a store or a pizza parlor. They could be making the next big game or adventure So, it's really a wide range of things and it involves doing things together, pretending you're together. So, right now, it's mostly Games or experiences
four
CARDINAL
kids buy kids how old are these players how old are these developers we have young players who are getting interested in coding who are getting interested in designing things but more and more the community on roadblocks has blossomed into this super rich
System
ORG
.
Thousands
CARDINAL
of developers making a living on the platform. Some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
a year. So, how many of these developers are really kids and how many of these developers are now Yeah well think
two 1 million
QUANTITY
plus developers a lot of them are grown ups and more and more in addition to the natural organic people that started on roadblocks we're starting up studios come in on the platform as well Game developers who are developing on other platforms starting to take a look at it so our developer demo A little bit older although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, muscl Does that change the dynamic of the plastic? I I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever by
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal studio would ever think of but when developed by young creator, you know We're gonna be we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it. There's gonna be a lightning storm. Like that kind of stuff. We see a lot of that creative game play coming from the younger developers. Who went to as a kid? Were you a gamer? I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time it was out in the boonies from
Minneapolis
GPE
,
Minnesota
GPE
. There were sandpits and We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods that
one
CARDINAL
key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time and that kinda got me interested in this I also heard you were the captain of your high school TV quiz team. Yeah, so think of think of
Minnesota
GPE
in
the 19 And 80s
DATE
where
every weekend
DATE
two different schools compete
four
CARDINAL
students from each school you know in a really funny
four
CARDINAL
by
four
CARDINAL
configuration on a quiz bowl thing as well yeah eating purri had Good quiz ball team. You eventually made it to
Silicon Valley
LOC
. Yeah. You went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid and you coming to life. You know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting, took
a few months
DATE
off, and I got really excited about there's this whole blossoming educational software marketplace at the
McIntosh
ORG
. It just been introduced and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software So when we looked at physics it was a whole different idea could we make a wide open labratory we could build anything any physics experiment bring it to life measure it see what it feels like you sold that company made some.
I'd open laboratory we could build anything any physics experiment bring it to life measure it see what it feels like you sold that company made some money became an investor and you invested in Oh, yeah. Wow. I I had a friend through account. I'm dating myself a little bit. But I had a friend to account. I'm curious what you learn from
the early days
DATE
of social media. Yes, so one thing I learned is it was really fun to invest but it's not my sweet spot. Like my sweet spot is trying to build and create things. I remembered, I think Account number
79
CARDINAL
on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interactive physics where we were simulating the world and then friends, they're seeing how important Those are a couple of the components that have come together in
Roblox
PERSON
. So, when you start a Roblox in
2004
DATE
, what was the idea back then? The feeling of this new category for me started feeling almost inexerable. It's We've seen futurist talk about it. We've seen a lot of movies. We were thinking yes, immersive threeD co experience. Kids flocked to
Roblox
PERSON
during the pandemic. You went public in the The pandemic
2021
CARDINAL
45 1 billion dollars
MONEY
market cap we spoke on that day even you have said that kind of growth won't keep up what kind of growth can we expect from roblox in normal times we believe it's gonna Part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people. So they're gonna go to school in
Roblox
PERSON
. If I happen to be taking my science class and I can't get into the classroom and we're dissecting a frog. We'll probably dissect the frog in something like
Roblox
PERSON
and a sim Which I think is gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the world some of us will be in the office some won't having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipit Thing where we both happen to go over and chat. I think also is gonna be very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. Universally important to human life asleep mystery surrounding its necessity and utility have only just been recently uncovered some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understand It's easy to memorize things that makes you smart if you can spit it back a lot of back but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what your brain figures out while you're sleeping. Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built. A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in this space.
A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in the space that I think is ultimately got so many years of growth to it and is a new category following other types of technologies. There's still so much innovation to be done and So much invention to be done in this category. That's mind boggling. The critics think that metaverse the term is just marketing. This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zuckerberg
PERSON
announce Plan to Change Facebook's name to
Meta
ORG
as if it was something new. Did that kinda bother you? No, of course not. It's really hard to predict in
five to 10 or 20 years
CARDINAL
. Companies that really figure it out and there's so many elements of innovation that are needed. Having a
UGC
ORG
community,
one
CARDINAL
of our strengths. We think that's like a huge starting point for us, but we're early in our quest for innovation here. Roblox has built a huge business selling Does this evolve into a much bigger marketplace? Revelation that people would ultimately make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or utility so it has form this robust economy it's allowed us to keep robot you know
Roblox
PERSON
is free for the vast Would Roblox ever partner with some of these other companies working on the Metaverse whether it is
Meta
ORG
or unity or epic or
Microsoft
ORG
? The core technology of, you know, how are we gonna ultimately support
50 1000
CARDINAL
people in real time on a Going to a concert together and waving at your friends. I think that's gonna be a lot of engineering work that each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
one
CARDINAL
place to another? I think they'll be lightweight ways of starting to think about that. So, what role Think apple and android should play in the metaphors and and would their policies need to change to really support this vision. We would take advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and apple kind of run their businesses but when we think about more and more developers making a living on platforms like us and having to build stuff. If those stores were to change, we would move most Money back to our developers. Your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job In
the third week
DATE
, when we were live, you can go imagine
Eric
PERSON
and myself back in our small office.
Eric
PERSON
and I said, oh my gosh, safety and civilities. It's we're gonna have to do. We had maybe
100
CARDINAL
people at the time chatting on roadblocks. We saw a few not that agreed just but early signs and we just made the call. This is gonna be The foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes on our platform gets human reviewed we filter texts very stringently especially for And under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us. Optimistic are you about AI and tech being able to do that I'm really actually optimistic we would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think over time it'll get to the point where if a
6 year old
DATE
is on our platform it's literally If the parents wanted to be there with them watching everything will be able to offer that type of thing no a lot of parents are terrified they're terrified of a future metaverse they don't understand the parental controls do you understand that feeling we do we actually have to I think it creates a Stay under.
A future metaverse. They don't understand the parental controls. Do you understand that feeling? We do. We actually have to, I think it creates a higher standard for us because I think we can't assume every parent is gonna get
Involved
PERSON
with their kids. There have been some serious content challenges, you know, Stories about Roblox being a playground for virtual fascists. What?
Kim Kardashian's
PERSON
own child Sex tape of her. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the off our platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. This question about kids and tech habits and screen time and he said it's something that even stresses him out. You know, this is the guy who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? How much it's a responsibility of both platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more like hanging out together. We're being on the phone together or doing stuff together Lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either We're involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? Do you see that?
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. Mobility. So, we have flick to switch there and really we're going to step by step electrify everything. And what does that mean?
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars oh look way out like a science fiction writer and talk about What I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
meta horizon worlds
PERSON
? Is You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the electric grid. Even those photo realistic and there's all these awesome avatars and connection and identity around the world. The things we start seeing built on this are wide Of things. So, you imagine this not just for kids but for everyone. Adults too. Okay. Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much.
Absolutely. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one of the creators on
Roblox
PERSON
who's coming up with avatars and stories and ideas and characters like that. We want them to be in the limelight. Roblox Took a dive on the back of
Netflix
GPE
results which Plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being in a market like this, you know, where we think ultimately,
billions
CARDINAL
of people are gonna use this Type of technology and the other exciting thing about this market Many big inventions that still have to happen. It feels like we're pretty mature but inside our company, we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step. Would roadblocks ever consider more in game advertising? Yeah, there's a funny trivia note I would share to all the
Roblox
PERSON
fans out there. There was a The very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on Roblox that's all gone now it's gone for a couple of reasons we didn't want it to interfere with the user experience and also our our virtual economy has become such a powerful way to power this that we are able to take that In the future though I think there's a certain type of advertising that is kids safe that is immersive that doesn't get in your way Take away from the ethos of what makes
Roblox
PERSON
great The people on
Roblox
PERSON
, you know, they're there to authentically connect with their friends and as long as what we're doing with these brands is very clear and on deceptive, appropriate for
those ages
DATE
. I think they'll they'll figure out the balance of how much time do we go into a store versus how much time do we go to a crazy Ensure tycoon and you know build an amusement park together. So either way this could be a huge new revenue stream for you. I believe it's an awesomely huge revenue stream and at the same time we've been very gentle towards it. So as you look ahead what do you think are the biggest challenges
Roblox
PERSON
will face? Favorite Vision plays out which we hope it does and we have people of all ages on the platform and we're around the world I think Any that civility as we grow as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way that's a big challenge. It takes a lot of thought. I think thinking through the technology I I really like we're very technology driven company so it's fun to be running a company where We have to do these
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges super interesting. We do a little rapid fire section just to get this. Okay. Are you gonna try to
Awesome
ORG
.
First
ORDINAL
question what's your
morning
TIME
routine? Wake up. Go outside on my porch do a CrossFit workout Take a shower go to work. Where are you most productive? Home or office? Both. Different types of productivity, homes, and state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show right Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. It all gets down to the joy of health really like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Hawk radio show. Yeah. Now that I've met you in person, I I get this. No way. You're being pretty fun to listen to yeah what was Hey so my
GM
ORG
was I would say starting in college when I would have insomnia at
2 AM
TIME
I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
retalia all that just Send to the people calling in. So, I after acknowledge revolution was acquired. I had
a year
DATE
. I had a little time to dabble. My jam was really trying to talk about outrageous topics. You know, Bling other.
The year
DATE
I had a little time to dabble my jam was really trying to talk about outrageous topics you know Gambling, other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. Yeah. You know, it's like call your mom. Please call. So, it's really scary if you're a No one's calling you inside I I made it really controversial I have people come on and debate interesting topic If you could have dinner with
Steve Jobs
PERSON
or Walt Disney Who would you pick? Both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some of the innovation but I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for
Oneies
ORG
. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
. Life is short. A valuable commodity What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance. I would say can I Make my roblox job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job as a CEO? Every CEO job is different. Like I like doing it. So, can I figure out what my role is? You mentioned your co found
Eric Castle
PERSON
. Yeah. Earlier who died Of cancer. Yeah. In
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks that Roblox has become? Wow I think he'd be proud It's a good question. Yeah. Like I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very He's just such a brilliant partner. Yeah. And he he also set the standard for taking the long view on how we engineer things. A lot of the Roadblocks is still You know, his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So, in
5 years
DATE
, will the metaverse exist? In the form that you imagine or is it take does is it gonna take much longer like what's the time horizon? Well it it's really interesting right cuz we're right in the middle of it right now in a sense with
50 1 million
CARDINAL
people every day on our platform. Yeah. It's already here. And at the same time Is ultimately gonna be possible could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all the anniversary really has existence since Online dial up muds really too deep very simple text you could call that the verse it existed in multiplayer gaming world of warcraft exist With more people and in
10 or 20 years
DATE
it'll exist photo realistically with
50 1000
CARDINAL
people Have so much passion for this job Roblox your final stop on your journey. What's definitely my final stuff but I think there's a lot of time ahead of me here.
Dave Bazuki
PERSON
overall blocks. Thank you so much. Access the financial world on demand.
Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
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ORG
. Start exploring to see what's moving the markets. Visit
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PERSON
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DATE
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ORG
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ORG
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ORG
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Bank of America
ORG
Know how to maneuver them machines Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If you're satellites gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem now. Of a collision is a lot higher now. We've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up Thank you
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks for having us. Just found out we actually lived in the same dorm in college.
Just a few years
DATE
apart. So, it's been almost a year since you took over From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. I wanna start with a quick report card. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later he passed the rains to andy jassy his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profi
Amazon
ORG
web services
Bezos
PERSON
has stayed on his executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. Does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back? On this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg Technology Summit
ORG
in
San Francisco
GPE
. I'd like you to grade
Review
ORG
of
amazon
ORG
's performance And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
with
Customers
ORG
. I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've A lot of good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much of the
PPE
ORG
and food and essential items and people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we've
Some people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39%
PERCENT
your
over year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Never happened before. But it was really hard to do that. And we had to take the really big footprint of fulfillment center footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
. We built out that transportation network and
just a couple years
DATE
. You know we nearly double the size of our workforce during that time and I think you saw it and
Businesses
PERSON
, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and So many companies in organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that So, what about investors? I mean, the stock is down significantly from a peak
last year
DATE
. Obviously, there's broader market turmoil Yeah I I think you know for investors or financially I'd say it's mixed you know I think we have some businesses are growing really strongly if you look at AWS you know in in
2021
DATE
Ruth
PERSON
37 year% over year you know it's not a 70-
One 1 billion dollars
MONEY
revenue run rate business. It's pretty unusual growth and we grew
58
CARDINAL
year% over year and our advertising business. You know, it's a
32 1 billion dollars
MONEY
revenue runway business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, compar During
2020
DATE
, but I think the real challenge for us there is on the car side and there have been several things that have happened. Some of which are more controllable than others. You know, I think the part that's less control is really around inflation and I think we The inflation will start to attenuate in
2022
DATE
and with the war in
Ukraine
GPE
, it just went the other way. It has significantly accelerated so the cost of trucking and line hall and ocean and air and fuels to substantially going up I think that will turn you at some point. No one knows how long that'll take. I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new fulfillment centers during the pandemic It's a weird to make decisions you know I made
2020
DATE
in
early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building on properties where we don't need it yet and we've let a number of leases lapse and not a small number you know both those things we've had a lot of occasions History where we've worked on productivity, made improvements, and we've a lot of clearly defined issues and I'm confident we're gonna get back to the right level of profitability. You are gonna sublease
30 1 million square feet
QUANTITY
of space. Is there a mistake in the ex Because of the horrible You have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39
CARDINAL
year% over
year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we made the decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, there has been some high profi Yeah I I think that And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion. But I still think there are Areas that we can keep improving. You know, and I think you know, the first one I I'd mentioned is safety. You know, I think that you know, in our fulfillment centers, that is the top priority and you know, when you get into the details, the number is an outside of all the spin of it all. You know, we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have, we've identified kind of a top
100
CARDINAL
list of Areas that we can be better at that we're just metronomically stepping through and so we made a lot of progress but we've a lot of work to do still.
Kind of a top
100
CARDINAL
list of of areas that we can be better at that we're just metronomically stepping through and so we made a lot of progress but we have a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy. We're laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane
the World Bank
ORG
just slashed it's forecast for global growth How do you feel about the economic climate Well I wasn't planning on giving any guidance to the guy But super bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you Believe that that equation's gonna flip at some point which we do. I think it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few obviously in
the 25 years
DATE
that
Customers
ORG
changed their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you know, Probably
3 to 5 years
DATE
long and we're gonna continue to invent
Continue
GPE
to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. Now, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employees who are
Paid
ORG
in stock. Haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do in anytime I've tried to a little bit I've been wrong so you know I think it's it's pretty hard to Hard to predict what it's gonna be in any short period of time. I do really believe that
Benjamin
PERSON
, you know, that
Benjamin Graham Max
PERSON
and that in the short term, the stock market tends to be a voting machine in the long term. It tends to be a weighing machine. I think if you, you know, we've been A lot of points
25 years
DATE
has been at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talked about a lot at
Amazon
ORG
. You know, the ultimate output for a company is share price, you know, and then other big outputs or free cash flow or profit or revenue. You can't Manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to work out I think we've had very good returns Investors and I expect that to be true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is
Eating
PERSON
it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. That might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination. Really
FTC
ORG
I think for most the
FDC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't
Do you see I think formos the
FTC
ORG
needs to be making sure that we're fully understanding this technology? We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? What are the moon shots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is
Astro
PERSON
the home real butter is it something else Well you know we have a unique way that we look at Big new investments and I'm not sure it's right or wrong it just happens to be our way and we ask ourselves when we're considering something
four
CARDINAL
questions we we ask If it's successful it can be big and move the needle on
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have confidence there? If not, can we acquire quickly? If we like the answer to those questions, we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation, investments that seem pretty obvious, like, you know, when I got to that company
Books
ORG
only retailer and then we expanded to music and video electronics and toys. People. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was little bit nutty at the We're just imagine what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments we're making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think we Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by Part of a prime and and so we have a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show reacher
earlier in the year
DATE
was a huge hit we you know we the Season we we just launched new boys season which is are you a big boys fan? Hey
Amazon
ORG
. Very good. Of course, we have go to the rings coming up, you know, in
Thursday
DATE
night
TIME
football. So, I'm very bullish about it. We also, We're excited about what we've done with
MGM
ORG
you know I think some of the assets there will go very well with the rest of what we're doing entertainment wise. So if you look at
Warner Brothers Discovery
ORG
in Paramount Stars and Global they're building really significant subscription So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant grocery business which is, you know, early stages for us I I'm excited about Piper which is our low earth orbit satellite that we're building. Gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how different
World
LOC
is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You're building the world's best personal assistant. We have, you know,
200 1 million
QUANTITY
endpoints already that are using
Alexa
ORG
. We're clearly onto something And then you are autonomous driving ride healing Zooks that were building you here in
Bay Area
LOC
. I just think with the way auto consumption is evolving, I think that Is the chance to be really significant business. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different company. Just like we were when AW Became successful. So, I think they're very worthwhile investments and bets and I'm optimistic We didn't mention
Astro
GPE
obviously though powered by
Alexa
ORG
Need our home robots gonna be
I think they're very worthwhile investments and bets and I'm optimistic about Didn't mention
Astro
PERSON
obviously the powered by
Alexa
ORG
but I mean our home robots gonna Where is it? No. It's not really widely available for sale. What's I hope you go one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role.
These days
DATE
, what kind of executive chair he really is, he said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside, it looks like he's really focus
Philanthropy
ORG
he's focusing on space what kind of an executive chairman is he What you know
Jeff
PERSON
has always gonna be involved and he has you know I I'm I feel very lucky to have been in
Amazon
ORG
for
25 years
DATE
. Very lucky to have worked directly for
Jeff
PERSON
for
20
CARDINAL
of them and we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is the optimize for customers and how I standards they need to be you know given how easy it is for people to switch The importance of invention and speed and so you know, I just feel very lucky to have had the chance to work so closely with him. So, is your relationship? I mean, he was your only boss Is your relationship Mentally different than it was when you were the head of Job you have the relationships different you know remember might
the first couple years
DATE
I work for
Jeff
PERSON
I work is what we call the shadow then what's really like achieve a staff and That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and and it's different when I'm in the CEO role but you know the cost and has always been that we have a great relationship And we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer. In the world
second
ORDINAL
only right now
Walmart
ORG
is is in that spot But amazon will probably soon surpass it
First
ORDINAL
vote to unionize at an
Amazon
ORG
warehouse. I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired pulled off this union vote what's your message to Like him. Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice where they wanna have a junior or not. They always have had that choice and it continues to be their You know we happen to think they're better off without a union for a number of reasons including the fact that you know it's it's much harder when you have a union to have a direct relationship with your manager And to get things done quickly. So, if you see something on the line that you think could be better for your your team or you or your or customers, Can't just go to your manager and say let's change it. You know, there's a whole process in in bureaucracy that you have to go To be able to do that. You know, and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up weed much rather here from every employee. Whatever is on their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time. You have to have
Competitive
PERSON
benefits and then I think if you look at Amazons they're very unusual in this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
Starting salaries now over $
18
MONEY
an hour which you know is is more than double the federal minimum wage. You get full health insurance and
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education, you haven't had one A career choice program that let's our performance center associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need You to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make
The mark that you want to make
Renewables
PERSON
. This is a level of uncertainty that we haven't had to deal with. Television and radio Stocked earlier enough all these precious materials you were just mentioning and we were on the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need The
FTC
ORG
has revamped And by some accounts is Reading it. Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? If you or a large company that's growing is to significant extent like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if somebody look, Was stand up to that scrutiny and I you know I think that's what we've tried to do in running the business. We can't control You know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at the fact, if you take out of, you know, take out of the equation that they're they're may not be Objective. You know, leadership when it comes to
Amazon
ORG
and that organization. If you look at the facts, you know, in our retail business, we're about
one%
ORG
of the worldwide retail market segment share. And remember,
85%
PERCENT
of it is still offline. And if you look in our
AWS
ORG
business
Yo
ORG
about depending on how you measure it
95%
PERCENT
of the worldwide global IT
Spanish
NORP
on premises you know and then we have a cloud business and then we have a portion of that and we were leading market segment share in the cloud part of this We operate you know who we compete with
NWS
ORG
is really on premises IT in addition to the clouds so you know these are relatively small percentages of of the Reply and you can kinda step through all the businesses and I think simply because you've been successful
Different
ORG
businesses doesn't somehow mean that you have a natural market power. It just means you've been successful in a couple different We're experiences but we still have AA relatively small amount of market segment sharing those areas. What about the
SEC
ORG
? You're being sued by them over
third
ORDINAL
party data and how you've used it. Do you think in the past
Amazon
ORG
made mistakes with letting employees intern How those
third
ORDINAL
party sellers were doing? Pretty good control. I mean, you know, we've, of course, disagree with the premise of that but I would say that we have very good controls with respect to the data that the different police sets are able to see. And by the way, I think that we can be better for sellers. You know, I I think Yeah we can have better tools from the good start we give better tools from the manage what they're doing across their their different
Units
ORG
. I think we can communicate better. There's a whole bunch of things we can do better. And we organize over every single email or communication we get from sellers. We do very regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with On in I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what Sellers don't really long for e-commerce software.
Business by virtual song on
Amazon
ORG
versus not a completely changes what's possible Don't really long for e-commerce software that exists in lots of places and Very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of the businesses they're building. So, we have a lot of work to do there like we're doing a lot of other places I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still really, you know, significant issue Sorts of businesses. We have worked really hard to open a lot more. Points of presence and ports and increase our capacity in getting products in but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well I I don't I don't really think of it that way Emily I mean I I don't think it's really about any jazzy era or anyone person you know and and and by the way AWS was not about anyone person that you know if you spend a time on AWS That is an unbelievable team not just an incredible leadership team which it is but just top to bottom and then the number of inventors and people care about customers
Operate
NORP
, you know, something where it has to work almost like a
Delton
GPE
. It's it's always teams and so, I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses It still lives offline. Oh my god. I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
you know the time I've been there I think It's gonna work small compared to
the next 25 years
DATE
. There is a lot for us to invent. On behalf of customers and so you know, I'm excited to be part of the team that makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we have a responsibility to do that and so you know it's it's it's a long journey that we're working on but I'm I'm excited to be part of it and you know I
Order
PERSON
for a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you.
Candy Jackie
PERSON
,
Sarah
PERSON
,
Amazon
ORG
, Do you see that coming? The moment news breaks
24 hours
TIME
a day. Boom.
Under
120
CARDINAL
countries. News breaks.
24 hours
TIME
a day.
Bloomberg
PERSON
.
Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
this group was broken by
Bloomberg
PERSON
's
Amanda Gord Tag
PERSON
on the product may read made in the
USA
GPE
but Made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
Sacha
Nadella IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mehotra
PERSON
and that's And that doesn't count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top? Incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a You watching the best of the cutter economic forum I manage cranny in
Doha
GPE
this
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of state to tackle some of the world's most pressing challenges from On
Ukraine
GPE
. Over
the next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with it on musk the world's richest person spoke to
Bloomberg
ORG
's editor in Chief
John McElth Waite
PERSON
about his head kind plans at Tesla why you thinks a recession is inevitable Course is ongoing bid for
Twitter
PRODUCT
. Respect to that the
Twitter
PERSON
transaction there's a limit to what I can say publicly given that is someone who was sensitive matter So, I would like to be measured in my responses here. Is not to generate incremental lawsuits. Rescue sometimes managed to overcome Yes I think importance. So
Twitter
PERSON
given you enough information. Well there are still
Result
PERSON
matters you you probably read about the the question as to whether Number of fake and spam users on the system is less than five% as
Twitter
PERSON
claims. Which I think is probably not most people's experience. On reusing
Twitter
PRODUCT
. So we're still waiting resolution on that matter. And that that is a very significant matter. So We're waiting on that. And then of course there is the question of will the the deck portion of the round come together and then will the shareholders vote in favor. So I think those are the
three
CARDINAL
things that stand in the You know, if that needs to be resolved before the trans Okay. What about the general state of the economy? Does that weigh on you?
Stand in the If that needs to be resolved before the transaction
Wait
ORG
. What about the general state of the economy? Does that weigh on you when you think about this? I mean you just described it. You have a super bad feeling about the economy. Are you still in that position? I've just said you earlier.
Joe Biden
PERSON
Has just come out and said that
America
GPE
is not inevitable. How do you feel about the economy? At some point. Best weather there is a reception in the near term I think that is more likely than not. It certainly isn't. It's not a certainty but Appears more likely than not What do you think I'm I'm I'm I'm with you Hey Facebook Can I ask you one particular thing to do with the
Twitter
PERSON
bid which is you know you are one of the And fastest growing investors in
China
GPE
Tesla you've talked about it being a
third
ORDINAL
of your sales going forward You'll know buying
Twitter
PERSON
that kind of public forum for free speech The
Chinese
NORP
historically don't tend to be very enthusiastic about free speech Worried Whether you can keep those
two
CARDINAL
particular horses running is is buying
Twitter
PRODUCT
gonna get you in trouble with the
Chinese
NORP
? Well,
Twitter
PERSON
does not operate in
China
GPE
. So, And I think It's heritage The As far as I know you're not under pressure to Got from
China
GPE
. So, I think there's I don't think this is gonna be an issue. And in terms generally of that issue of freedom of speech and
Twitter
PERSON
you've talked about
Twitter
PRODUCT
being making it even freeer and letting more people onto it. Is there a limit at all to to who you think should be allowed onto
Twitter
PRODUCT
? My aspiration for
Twitter
PRODUCT
or in general for the digital town square would be that it is as inclusive in in the water since the word as possible That is it is an appealing
Years
DATE
. So, I mean, I do like to get like
80%
PERCENT
of That's it
North America
LOC
and perhaps Half the world or something. Ultimately, on On
Twitter
PERSON
it's in one or another And that needs that means it must be something that was appealing to people it it obviously came out of your place where they feel uncomfortable or harassed or there was something not use it can you set the record straight on
one
CARDINAL
thing which is this issue about the layoffs I think you Initially that Tesla
10%
PERCENT
of the workforce would be cut then
10%
PERCENT
of salary would be cut then salary would stay flat and overall headcount would go up what What is the number? I know there's already I think being AA law
About the 10%
PERCENT
is is
10%
PERCENT
the goal to reduce the workforce so what is the number that we should think about or that your planning So it has reducing the salary work was a
roughly 10%
PERCENT
over
the next probably 3 months or so.
DATE
Expect to grow at our
hourly
TIME
workforce. We're actually quite clear that we expect to grow up out around
hourly
TIME
workforce. But we Very fast with on the salary side And we grew a little too fast in some areas and so it requires reduction in
Two thirds
DATE
hourly
TIME
and
one third
CARDINAL
salary. So I guess technically attempts that reduction in the solid work horses only roughly at
three three and a half percent
DATE
reduction in total headcount.
Egypt
GPE
's finance minister doesn't think we're in one yet but does reckon the economy is slowing. I caught up with
Muhammad
PERSON
mate. No we are not already in a session Back to
Doesn't think we're in one yet but does reckon the economy is slowing. I caught up with
Muhammad
PERSON
mate. No we are not already in a recession But we have now Of economic
Wallet
PERSON
bank I'm a Have reduced their expectation for economic growth but If the current direction To be continued and Escalated I believe that enoughly we will go for recession. Do you see that because of higher interest rates that are coming to barren your economy and the global economy? Package of elements will work together High cost of financing, food security, And also pressure on mini developing countries in this world which can contribute heavily to Negative impact which will be at the expense of their ability to grow Are you in shock Or panic over fuel and food at the moment. Panic rather than a shock I believe that Since we'll activate further it will materialize to a big shock. The consequence Of food and fuel is
13%
PERCENT
core inflation sir I've had people tell me inflation is topping out. It's it's it's over. Second half of the year to get better. Do you share that view? Do you think inflation has plateaued or topped out? Expectation is to increase not to decrease. Significantly It depends Hey If oil prices will continue this event Food prices continue to this trend if the federals and the other central banks will increase interest further Particular You know eh we may start to see eh in addition to what we have seen until now Supply chain
Difficulties
ORG
to get financing So, it's
13%
PERCENT
on the core at the moment. How bond could it get? If you are talking about
Egypt
GPE
then particular indeed sir
13%
PERCENT
You know will depend on how much inflation we are important This is a significant part. Why? Because if infilation accelerate further in
Europe
LOC
and
United States of America
GPE
as a result of all these fact And in addition to that higher interest rate will add to higher cost of financing this will mean that we will be negatively impacted we hope That this will not be materialized in
the coming period
DATE
. So, we should you know, I'm worried also about how military policy as a central Feathers And we don't know what will be there decisions very soon to the act to in
Felicia
PERSON
Further significant rate hikes from
the Central Bank
ORG
. I hope that
Egyptian
NORP
economy to grow and high cost of financing it will be a problem for the industry for the For the economy but eventually infiltration is a core business infection.
Financing cost for the economy but eventually infiltration is a core business
Central
ORG
bank of
Egypt
GPE
. Up next the deputy chairman and CEO of
the Kui Patrodium Corporation
ORG
tells us how much of a premium he thinks the war in
Ukraine
GPE
has put in the oil prices. This is
Bloombad
GPE
. Choose
Bloomberg
PERSON
. She's a great question. Great question.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Find people analyze Marcus You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest ambassadors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Energy was a course the major theme of
the week
DATE
and the deputy chair and CEO of
the Kuape Patrolium Corporation
ORG
told us he thinks the war in
Ukraine
GPE
has only highlighted how important energy is to the world
Hey Premium
ORG
into the oil market. He caught up with my colleague. We think that oil is there for the long term in terms of even in any energy transition. So We maybe concerned about what obviously
the next 18 months
DATE
is gonna do for financing and and for our cash balances but over the
Price
ORG
express. Yes. Does that get pushed back? The Mistake that a lot of us a lot of people have made Before the the Ukraine war was to say this is gonna be a war against fossil fuels and that we must stop oil production. Well, the world is using more carbon And this crisis in in the
Ukraine
GPE
For all the humanitarian issues that come with it Hydrocarbons have a big role to play now can we make the hydrocarbons cleaner and and more efficient absolutely that's how what we're trying to do and that's what we're investing
Footprint
PERSON
of the oil barrel. We're in
Kuwait
GPE
and I mentioned this earlier today, we're in
Kuwait
GPE
at the lowest end
Footprint
PRODUCT
. Now, we need to stay there. That's gonna require a lot of investment.
Earlier today
TIME
we're in
Kuwait
GPE
at the lowest end of the Coscar both in Cost and carbon footprint. Now, we need to stay there. That's gonna require a lot of investment. See more investment in the short term or no? Continued investment. Prices where they are, that is spring investment. You're seeing some rings coming back into into action in
Permian
NORP
, and you're seeing
US
GPE
production going up overtime. You're seeing a lot of us. Also, continuing to, to, to produce now.
Four
CARDINAL
,
four
CARDINAL
, companies like
KPC
ORG
, we look at the long term, so we're investing right through But companies that that don't do that are are putting in more investment right now. The the Right now is really about the cash cost of of those investments withinflation and and steel prices and whatnot. Yeah. Going through the roof. It's going to be an issue. The energy price. It's so high right now. Stabilize. Barrel oil which is not that high. Over the past Which is still comfortable. The energy intensity of the world economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
Continue to go down. So, oil prices, yes, they do impact Economic growth into a certain Do you see any demand destruction in our conversation Anywhere. We're getting Calls from our customers say demanding the same amount of oil and some cases a little bit more.
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation. This is
Bloomberg
PERSON
. We've got the information and insights. Yes it's about renewables This is a level of uncertainty that we haven't had to deal with. Television and radio No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming to
Taiwan
GPE
and We will not just cut and run. The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. Welcome back to the best of
Carter
PERSON
economic forum for
treasury
ORG
secretary
Steven Manuchin
PERSON
says inflation in the
US
GPE
can be brought onto control Follows through on its pledge to continue raising interest rates. He spoke to
Bloomberg
PERSON
's
Eric Shatzger
PERSON
. I do have a lot of confidence in in
Charapowell
GPE
by the way it's fun. I can now talk about the
fed
ORG
. I wasn't allowed to talk about
Fed
ORG
policy for
many years
DATE
. You know, I guess my my most
Advice
GPE
to the administration is don't do any.
The
fed
ORG
I wasn't allowed to talk about
Fed
ORG
policy for
many years
DATE
. You know, I guess my my most important advice to the administration is don't do anything to shock the economy. So they had been talking about raising taxes. They had been talking about making different changes. Not now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit. But this is really now the federal reserves job Administration needs to be careful not to get in the way. I do think, you know, the number
one
CARDINAL
thing the administration can do and I think it's not just them. It's obviously otherworld leaders is we need to find a political solution The military solution alone Not going to be what stops this You have confidence in chairman
Powell
PERSON
and you know well. Having worked together With him and other members of
the federal reserve
ORG
. The reality, however, is that financial markets aren't certain whether they have confidence in chairman
Powell
PERSON
. There's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough
Fed
ORG
lost credibility With its On inflation that it was transitory
Two
CARDINAL
questions Do you think that
the Federal Reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And What will it take to restore that last credibility Well let me just say it wasn't just the federal reserve the administration also Was talking about inflation would be under control. So, you know, I think from the Fed Stamppoint In hindsight they clearly waited too long but having said that when you're managing the economy and you're the federal reserve I think you have to balance both sides of that equation I don't buy that the
fed
ORG
has lost credibility I think the fact that the
fed
ORG
moved in
75
CARDINAL
basis points which
a month ago
DATE
is not what the market expected I think chairpower is now signaled another
70
CARDINAL
Basis points. Think if you look at the dot plots which I never was a big fan of these dot plots but that's another story. You know, I think the market understands that expectations are that is the feds gonna raise rights. I think the portfolio is just as important and they're they're beginning to slow that down You know, look,
a year ago
DATE
, I said, we're gonna have
ten-year
DATE
treasuries,
three to three and a half percent
CARDINAL
and people fought that was really high. We basically have
10 year
DATE
treasures at
three to three and a half percent
CARDINAL
If the market really didn't have credibility in the
fed
ORG
, interest rate, the long end would be a lot hotter than it is. Even if
Europe
LOC
enters one he still bullish on the region.
Mansour Ben Ibrahim Al Mahud
PERSON
spoke to my colleague We could go into a recession in some part of the world maybe in
Europe
LOC
I had commented that we might go on to our recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review in
Europe
LOC
and General in the long term
Europe
LOC
as a destination of a lot of talent They have a very good education system. It's a tourist ticket destination as well And they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over any other you know countries So It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is is you're about the moment that your biggest But also your biggest opportunity if you look at the part of cash how much you wanna put in
Europe
LOC
compared to other regions in the world see from from
2018
DATE
once we have an answer or strategy we we were very vocal about our concentration in
Europe
LOC
no And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we
No. And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we are going full speed and and the
US
GPE
market and
Asia
LOC
We have a, you know, other friends I set a location to remove geographies and we would like to To reach a proper location between the geographies But again,
Europe
LOC
, we will not stop investing. We will continue investing. Where I have, I wasn't in
Europe
LOC
recently and I'm meeting and I have noticed a lot of activities and technology space and in
Europe
LOC
. I think at some point you're looking for assets infrastructure assets in
Africa
LOC
. Is it still the case? Yeah, of course, I've been if we can deploy more and I freaking and for a structure would be a fantastic. We have been investing and renewables as well and and
Africa
LOC
. And we would like to do more. It's a little bit than a slower pace and other you know a countries But we are trying to find our partner to deploy more in
Africa
LOC
. Anything with
Russia
GPE
so you you have an I mean actually AA pretty sizable and considerable assets in
Russia
GPE
. What will happen to them? Still status quo we are not investing more in
Russia
GPE
at the same time to be practical you cannot exit I know some some companies have announced to to exit it but and in reality they couldn't We are monitoring the situation in
Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are Embedding any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of
Ukraine
GPE
. Are you in touch with the
Russian
NORP
government about some of these assets? Naturally right now but but you know we have a big a big investment in
Rosener
PERSON
as you know
Rosenth
ORG
itself is not undersanction. Of course we have a fiduciary
2 hour
TIME
future generation of course we will be in touch of them for for the dividends that we we deserve. But any further investment now What do you do with crypto right now? So, it was, I mean, it's up, it's down, depends on stable coins or or other ones. Are you interested? At class? No, trip to now. A blockchain yes But we have very clear review on this and and our team and and the technology space are exploring opportunities in the blockchain. And that's all from the counter economic forum right here in
Doha
GPE
you can find complete coverage of the event including full interviews and articles the destination
Bloomberg
PERSON
. Com
Communicating
PERSON
for staying in touch.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials People. Analyze Marcus You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. From
Bloomberg
PERSON
. Start exploring to see what's moving the markets.
Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars. People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world People that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Renewables. This is a level of uncertainty that we haven't had to deal with. Petitions should be on social media because it's also their way of connecting with people and they certainly have a right to free speech. So, I don't think it was easy Matter to to decide whether Mister
Trump
PERSON
should be taken down or not and we actually also touch upon an hour decision that
Trump
ORG
should not be taken down because he was saying falsehoods about the election. We only said that it was right to take Mister Because he was sighting violence. Hello and welcome. Billions of posts from
billions
CARDINAL
of users. Political, social, and financial power, bigger than some nation states. So, how do you oversee Facebook? That job falls to the relative Hey Facebook oversight board dub to the social network so called
supreme court
ORG
and my guest today is it's
Kota
PERSON
hella taunting who was
Dan Mark's
PERSON
first
ORDINAL
female prime minister she led the centre left social
democrat
NORP
In a coalition and held that post for
4 years
DATE
until
2016
DATE
now she's helping to oversee the tech item which operates under the parent company
meta
ORG
and also owns
WhatsApp
ORG
and
Instagram
ORG
So can it really be held to account even by former world leaders professors charity bosses and noble lawrence add a time when the social network business can block a
US
GPE
president and as it tries to curb COVID misinformation arguably It's a more important role than ever.
Matt
PERSON
. Welcome. Thank you very much. What we'll get to that role shortly but I wanted to just come to something which I find fascinating about you. You were 48 when you left the biggest job of your life. It's actually very interesting because I I think that Ask prime ministers we become young and younger And that also means that we leave earlier and many former prime ministers they actually yeah died on the job but we are a generation of politicians that came into politics quite early and I also leaving quite early and that means that I was Just before
50
DATE
. Er and had just to shake my head a bit and find out what's what's there for me for the rest of my working life. Er and was extremely fortunate that I got in contact with say the children international here in
London
GPE
. Er and started talking to them because Needed a new CEO and I took over that role and was so happy to start a new chapter with something so meaningful as working for children all over the world. Can you remember that
the day
DATE
after you ended being Prime Minister? I mean did Get your jogging bottoms on, you slippers, you slob about, what do you do? It is so weird to stop being prime minister and I think there's nothing that compares to that. Your whole life changes.
Being prime minister and I think there's nothing that compares to that. Your whole life changes and I remember very clearly coming in hugging my chauffeurs and my the police that had been helping me all the way through. Hug them goodbye. My house walked in close the door behind me And quiet Quiet no one phones you the office the party you used to people connecting and talking to you all the time and stuff happening
Time
ORG
. And it was just quiet. So I remember that quiet. It was a taste test not like AA depression but a little bit of a situation where you're not quite sure how you live in this life without all the bus that was around you. Er but I watched Game of Thrones for for
a month
DATE
. I got on. Okay. That was my way of transitioning into just being a normal person again You mentioned about becoming the chief executive of save the children That came to an end and your next role which is as I was just saying in my introduction it's such an important and pivotal moment to have such a role is co-chair of this Facebook oversight board I just want to ask first Who asked you to do it and why did you want to do it Well we all know that social media has come up as and has for a long long time been very unregulated and basically what we saw was that the ultimate decisions about what content stays up on social media all gets removed is taken by the social media company Himself and ultimately mark soccer book
Somehow
WORK_OF_ART
, that doesn't feel right. We need probably more regulations or social media but it also seemed a better way of doing it That Facebook was actually outsourcing to an independent body How their content should be reviewed and so so basically the reason why I took on the role is because I consider the oversight board
Independent Facebook
ORG
has to listen to our decisions they have to follow our decisions and we also have this opportunity to give them advice or recommendations of what they should do on social media and that goes both for for Facebook and for
Instagram
NORP
so on last we have been promised complete independence And that they would actually abide by our decisions and follow our decisions. I would not have done it. So, it's basically Facebook's leadership. Asking me to do this and we look Very carefully into whether Be an institution that would be have that complete independence. Let's definitely come to the intestines in just a moment if we can. But are you comfortable with the amount of power matter has overseeing Facebook,
Instagram
ORG
,
WhatsApp
ORG
? Yes or no? I mean I think social media has been too unregulated for
too many years
DATE
and obviously the oversight Not dealing with everything met so they'll be a
Texas
GPE
discussions and other discussions Discuss discussions that we are not dealing with. We're dealing with content but there is absolutely no doubt that until we start at our work meta was left too alone in terms of deciding on content whether content should stay off or get removed Making their own rules as they went along the transparency was missing it's still is and that is why we need regulation and we need an oversight board What do you say to those who are concerned that you are funded by facebook to police Facebook? Hey Facebook cannot interfere in any of our decisions. They have to live with our decisions. When we decided on the case with regarding Trump for example, they had to follow our decisions and I don't talk to none of us talk to Facebook about how we should decide anything. So, it's up to I'd ever wanted to decide do they think that's independence I don't take any orders from Facebook don't take any orders but you can't necessarily know what they're not telling you and and for the world you know the whistle blower
Francis
PERSON
yeah Houdin came to people's She came and spoke aloud. For instance about that high profile Facebook users got to follow different rules and receive special treatment. I mean how could you trust Facebook after that? Do you have to trust To tell you. No, we have to find a retrust in Facebook after that because for example on the crosschecks that
I mean, how could you trust Facebook after that? Do you have to trust Facebook to tell you? No, we have to find a retrust in Facebook after that because for example on the cross checks that
Hogan
PERSON
was talking about There's no doubt that we didn't know enough about that which we have criticized a better for not telling us sufficiently clear about these crosschecks also when we asked about it we didn't get sufficient answers so so this is something we are going to follow up And I think just the fact we have existed for
a little more than a year
DATE
now has set some light on the lack of transparency the crosschecks the fact they don't talk about these things in public and other aspects of Transparency with with
Meta
ORG
. So I do think that
Francis
PERSON
had to say I was yes some of it yes I was annoyed when I found out that the crosschecks that we had been asking better about they had not given Feeling answer to our question. Sorry. Cross checks is what they do with these high profile individuals that has an account Where they seem to be special For high profile individual. Been told about it and when we asked in the context of the
Trump
PERSON
case that we looked at. Yes. They didn't give us a fulfilling answer. Which we have criticized also publicly. So I think it actually underlines that you're right. We don't know what we don't know but gradually when matter is forced to open up more to us and then also To the yeah but that's absolutely but that's why it's good to have whistle blowers but I also think our role here is to keep asking those questions we've also asked
Frances
PERSON
how can afterwards we had interviews with her because we invited her to help we have And we are probably going to speak to her again. So we have spoken to her and oversight board to get even more information and we will continue to talk to anyone who's got anything to say about matter that we think will help us in our work and learn from that and feed that back to to Facebook. Knowing that you Be misled I wouldn't call it misled. I think that's that's your word, not mine. Okay, what? So, what would you? They didn't give us Okay. That you've been left in the dark. Yeah. Over something. Is that a better? Yeah. Way of putting it. It's it's details. How do you then trust Facebook do you trust I think Facebook should be much more transparent with the oversight board but also with a general public which is actually more important and I believe that the work that I'm part of in the oversight board will have that effect. Do you trust them You're the co-terror of the book. Yeah, I I trust Facebook that they give us the information that we're asking for. Even though they haven't. I don't think they were completely aware that they didn't but but that's a different question and we have criticized them for for it and there will be other things in They left you in the dark. I don't know you had to ask me to that but I think the most important you ask me do I trust Facebook I trust Facebook generally but that doesn't mean that they will in this instance but also further on down the line there will be Areas where we will criticize matter. We criticize matter every time we take a decision on anything we have already issued
more than 80
CARDINAL
recommendations for for
Meta
ORG
and we will keep doing that. We push them hard on some of these So I don't need to trust
Meta
ORG
completely. I need to trust that they give us the information and they answer our questions truthfully which I do. But I think that that will actually result in matter treating their
Better
ORG
and being more transparent in general. The world like
bloomberg
PERSON
. In
the coming months
DATE
. Do you see that coming?
24 hours
TIME
a day.
Bloomberg
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your global business authority.
Bloomberg
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has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
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Now you can simply type phrases in everyday
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in the command line. Compare financials What do you want to know
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DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
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. Com webinars People ask me all the time what is the key to being a really good ambassador? I tell them it's the surround yourself with and work with the best investors you can find. On
Bloomberg Wealth
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, I'm gonna take you to meet the greatest investors in the world. The people that I would like to have managing my money. If the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Hey
Mark Zuckerberg
PERSON
still be in charge I think it would be very wrong of me as a co-chair of the oversight board to start having opinions about who leads matter so I will refrain from from
Adding
LOC
into that discussion. I will not do that. Because I think it'll mix up what the role of the oversight board is. Okay. Which is to look at the content now. I know you've got a lot of Hey Facebook can I tell you something people
Almost a year ago to the day
DATE
really Facebook decided to Trump for sharing a video of his support To his supporters some of his supporters were storming the capital you upheld that view that decisions he suspend him indefinitely but not permanently is that right It was a very interesting situation where Facebook had decided to decide to remove
Trump
ORG
from the platform based on the fact that he was inciting violence and they asked us whether that was the oversight board whether that was the right decision that was
one
CARDINAL
or not one of What we thought about this and we agreed with
Meta
ORG
that they it was okay to remove mister
Trump
PERSON
on the basis that he was inciting violence but we disagre With a sanction that matter had given. So we asked them actually to go back and find a new sanction for mister
Trump
PERSON
. So it became Case about meta and an arbitrary sanction than it was about mister
Trump
PERSON
. System as well as taking a view. Yes. On that. Yes. Some people did view that as anti-democratic you know
75 1 million
CARDINAL
people voted for it. Yeah. And Facebook is in the situation where it offers everybody the platform. And I suppose what would you say to those people who say he has a right to be on Facebook The most positive thing about social media Is that and we forget that sometimes when we discuss social media is that people have been given voice where they otherwise would not have a voice agency and so many people can actually Make groups create demonstrations. Be together on social media where before they didn't have a voice. So that's the most amazing thing about Media and of course politicians should be on social media because it's also their way of connecting with people And they have certainly have a right to free speech so I don't think it was easy Matter to to decide whether mister
Trump
PERSON
should be taken down or not and we actually also touch upon an hour decision that
Trump
ORG
should not be taken down because he was saying falsehoods about the elections that he Not speaking the truth about the election result we only said that it was right to take mr
Trump
PERSON
down because he was inciting violence Within Facebook's own rules you can't incite violence I got the right to speak but I don't have the right to speak if I'm actually inciting violence
But I don't have the right to speak if I'm actually inciting violence against you or anyone else. So that is where we have to draw a balance and I we thought that
Meta
ORG
did that the right place. Of course Mister
Trump
PERSON
has the right to be on on Facebook and Instagram if he does not Violence. When's he coming back then? I don't know you have to ask me to that. Is there a date? I I don't know they've they've given him a I think gave him
2 years
DATE
or something like that. Yeah. So you have to ask
Matt
PERSON
We'll be back in time potentially for another run at
the White House
FAC
. We'll see. That's all to matter. We we will see and then you'll look at it of course that's part of the of how it works as we're learning. It's Hey Facebook a platform or a publisher It's a platform in my view cuz it sounds terribly like a publisher. Do you think? As an editor in the way you just describe that view of
Donald Trump
PERSON
? I don't think so because anyone who Platform where people can can be part of it. They have created some rules. So I do think it's it's good they have the community standards. They actually really good. The community standards that they have. The problem is that they're not always followed. Er but Need to stand that's are good. Er so you said that decision. So it's been through it That decision about
Donald Trump
PERSON
just to go back to to how you push it Was not made by the community. It was actually by
meta
ORG
. It wasn't by, you know, users coming forward. So, that to me, you know, as a journalist, brings to mine an editor sitting in a room. Saying, Why don't I don't think that's okay for us To publish. Yeah. But I I don't zucchin that has been about Facebook Long time and of course if it admitted to being a publisher it would be subject to very different rules. Yes. So you don't accept that characterization. I don't think met says a publisher. I don't think they see themselves as a publisher. And I are And I think we also have to find a new way of seeing that. That's why there's no doubt we need regulation. Very much like what we have. You're bored. You said you only look at concert. I bet. Yeah. Yeah. Does it tip over into not into being a platform and not A publisher what keeps well I think we're well we're well past the point where you can just be a platform because you have to rule because otherwise it just goes crazy you'll have you'll have to take responsibility What's being published? Understanding of the word having it's cake and eating it I don't think so. I think they are completely entitled to have their standards for what they want for on their platform. Regulates us. Of course entitled to now regulate the area. I think we also have to Ask the question do we want Media To be a publisher. No but that's the whole point. A lot of people don't. Which is why they want
Donald Trump
PERSON
back on Facebook. And which I think is a fair point of view but do we do we want one? But do we want social media to then be you can put anything on it the laws Cat to pay so if you look at the law governing this
US
GPE
law this
section 230
LAW
excuse me
State
ORG
social media company shouldn't be responsible for information produced by someone else which means they use a can publish what they want and that Facebook isn't liable. So which is it? Do you know you should have Facebook is being liable sometimes? And isn't other times. It's very important. But I think what you are asking is really underlying that we need regulation but also on the lining that you can't take social media which existence All shapes and sizes in many different countries all over the world and squeeze it in to a regulation that was for Get previous and all the centuries outlets Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio
No one covers the world like
bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming true
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. Do you come down on the side broadly taking a step back coming away from the detail but social media is a force for good I do actually And I think we sometimes forget it because people are asking really really harsh questions and demanding more transparency and and criticizing matter and social media and
Twitter
PERSON
another companies But I think we sometimes forget we'll be like to go back to a world where we didn't have social media where we couldn't connect with each other on on
WhatsApp
ORG
for example or or communicate with each other getting contact with each other and also Being that when I was CO save the children international I met so many people The world in refugee camps and women who want to organize label organize organise for microbanking or whatever They could not do these things without being able to connect via social medias. Black Lives Matter. Me too movement. I could go on. Of course they would exist and they won't Before social media but when you wake up I do think that social media is a force for good but We're not there yet. I wonder are you grateful you didn't grow up with Media. Well I think no I'm I love my childhood and I like the simplicity of my childhood. I really did. But I also think when you look at young people today I have
two
CARDINAL
kids. We have Kids they are
2025 22
DATE
I think that they know more about the world. They're clever. They are better than we were. We also have an individual responsibility as parents to bring our children up but also children growing up to teach them how to be In the world that we have now so I don't I think we must be very very careful not to paint this in black and white so everything was just better I know that's not what you do but everything was better in the old days because there's so many good things particularly for for people perhaps more marginalized people in the rest of the world that being heard There has come of social media and I've met so many people who finally has a voice because of social media and we must be careful not only to judge this by the narrow lens in the western
Nordic
ORG
world because social media Much bigger than that and also I've been just to say you know The societal ills that come out on social media. We're not created by social media. No, yeah. It's a platform to see them in a different way. As well, but I was just gonna ask you about something else as we, our time together to come to an end and it was about
Joylessness
ORG
and joy because some feel taking it from the perspective I am at the western perspective I recognize that. But the internet certainly did used to be a bit more fun. You know you could share some jokes and you still can't be busy. But but people sort of allowed each other to to say things a bit tongue and cheek a bit sarcastic. And I was just looking back. And you took a selfie When you were prime minister that you know I'm gonna be saying yeah yeah but for everyone else and you are at
Nelson Mandela's
PERSON
Memorial you're a prime minister And on one side was
Barack Obama
PERSON
and on the other side was
David Cameron
PERSON
and if I was you I'd also be thinking this is an interesting In
the days
DATE
before social distancing. So you're all crowding. You have a selfie And some said you know this is not what you should be doing at a memorial Actually you responded saying you know we're we're people. We are people. Yeah. And it was a joyful occasion in many ways. It was a it was a very joyful location. It was a memorial but it wasn't a sports stadium and the
South African
NORP
like there was drums. There's music that was singing.
In many ways. It was a it was a very joyful location. It was a memorial but it wasn't a sport stadium and the
South African
NORP
like there Promises music that was singing it was quite AA joyous moment and it almost a celebration of his life yeah we sat in the corner all the headsets of government and there the cameras were muscled in a way I was sitting which was close to Obama we had a nice time Everyone was laughing and and I had not taken selfies at this stage. This was my
first
ORDINAL
selfie
ORG
. When the president of
America Okay
ORG
. Of the dictionary
that year
DATE
because it became so famous and I just thought this is this is where you take selfies. So I'd just learn to take selfie from my my oldest daughter. Quite an impressive
first
ORDINAL
selfie
ORG
. How good is it? It's not very good. I'm the only one looking at selfies actually me and so but is it is actually it was fun but people did criticize it because they thought it wasn't serious and it certainly wasn't serious and it was it was interesting to To see that we were just
three
CARDINAL
people in the moment and I said oh let's go try this and it was like a new thing back then it sound like David come and really try to get in in that moment just do it with
Barack Obama
PERSON
it was quite fake
Michelle Obama
PERSON
Just on the side if I remember correctly of the image that was taken if you taken it yeah looking you know not in the picture just quite quite stand straight ahead it was never published the selfie I don't think no I got it it's on my phone I have actually pubs. I wrote a book. No, I haven't framed it. I wrote a book in
Denmark
GPE
. Hey,
Danish
NORP
, and it is actually in there so you can, it's in there. I've seen Okay I haven't I haven't seen that but I suppose just just really to get your Which is the you know there's a lot of hate people don't necessarily see politicians as people and and I just wonder now you're not
one
CARDINAL
anymore we still marry someone but certainly you're not AA world leader anymore do you think it's at our peril that we don't see our leaders as people Yeah I think it is and I I always just want people to come down a little bit because we are all people and we have a got a private life. I'm not talking about being soft on politicians and not criticizing for them when they do things and I've been criticized a lot and Prime Minister's been criticized a lot. So, that happens. But maybe if we all come down a little bit also on social media, we would just have, we would just be nicer and I think the rules should be that we try to treat people on social media like we would And people are very polite to each other when they meet when they stand the cue together when they take the chew whatever Perhaps we should try and take a little bit of that politeness into social media and the world would actually be a better place. Hello
Tony Schmidt
PERSON
thank you very much. Thank you so much for having me. And thank you so much for being with us. Until we meet again. Mask up. Stay safe
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
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ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
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. Com webinars. People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution.
Lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution.
David Weston
PERSON
. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio.
China
GPE
slows the
fed
ORG
worries and former President
Trump
PERSON
strikes back this is Bloomberg Wall St I'm
David Weston
PERSON
. This
week
DATE
's special contemporary
Larry Summers
PERSON
of
Harvard
ORG
on where the housing market is headed. Softness in the future with respect to housing. International finance on the risk and the opportunity of zombie companies. Money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere. It was
a week
DATE
of signals some subtle and some not
China
GPE
sent an unmistakable signal that it's economy is slowing something that a
10
CARDINAL
basis point rate cut doesn't seem likely to fix She is confronting a number of both you know short term and long term challenges right now I probably the number
one
CARDINAL
thing is the poor performance of the economy. Former President
Trump
PERSON
kept up his attack on
Republicans
NORP
who supported his impeachment though Congressman
Liz Chaney
PERSON
of Wyoming said she wouldn't stop even after she was soundly beaten in her primary. Said since
January 6
DATE
that i will do whatever it takes to ensure
Donald Trump
PERSON
is never again anywhere near the oval office and I mean it. And there was nothing subtle about the inflation signal we got out of
Great Britain
GPE
coming in
over 10%
PERCENT
Headed even higher. I don't think I'm overdoing it using that language. Becoming entrenched. Reading me
minutes
TIME
you have to feel that this is a sort of a doveish lead and it supports chairman
J Powell
PERSON
's tone at the news conference following the
June 27
DATE
meeting beneficial noted that Parts of the economy notably housing. Just take a look at the markets
this week
DATE
with the SMP
500
CARDINAL
shooting up on
Tuesday
DATE
only fall back down to earth and beyond on
Friday ending the week
DATE
down one. Two% at
42 28
DATE
and the Nasdaq was even worse Climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt by concern about And they got just under three%
297
CARDINAL
. To help us understand what the market may be trying to tell us welcome now
Bob Prince
PERSON
he's co chief investment officer for
Bridgewater Associates
ORG
and
Ed
PERSON
Hyman chair of Evercore ISI and vice chair of
Evercore Partners
ORG
so On both you back to Wall St. It's really a pleasure to have you. And let me start with you. You follow the economy and what's going on in the economy? We've talked about the markets. We've talked What's the economy telling us Well you can't cut.
We've talked about the markets we've About the
fed
ORG
what's the economy telling us Well, you kinda make two parts to it. Obviously,
one
CARDINAL
part is what the real GDP is or auto sales and there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part Economy is doing okay. As you know, we serve a companies And our retail survey dropped sharply
this week
DATE
but still pretty elevated Housing is really getting hit But on balance economy is doing okay I think it's probably going
two
CARDINAL
or three% but headed to
one%
ORG
I'm sorry bank bank loans came out
this afternoon
TIME
and they're up
11%
PERCENT
now. And retail sales
this week
DATE
we're you know pretty decent On inflation which is much more important I I'm pretty convinced that inflation is slowing Of oil prices came down gastling prices came down And In the weeds used car prices dropped about
three%
GPE
and
the latest month
DATE
And we survey retailers pricing power that's now plunging you've heard the stories about the inventories being high and we have been tracking that for a long time it's now really coming down But the most important part and we don't give my state on this or wages. And obviously the labor markets are very tight But they had from the conference board
this week
DATE
A measure of CEO confidence with almost a record low. And another survey That showed
80%
PERCENT
of workers were concerned about policing their job. Go go figure that But we serve a employment agencies
every week
DATE
And ask him among other things about wage pressure and that's now pretty clearly hooked down So I think you're beginning to see some moderation in wages on top of you know prices now cooling and the economies calling So
Bob Ed
PERSON
sees inflation started to come down. Questions how fast is coming down but starting to come down. How do you see it? And is it coming down enough and fast enough so the federal not have to go much further in red hikes? It's definitely But the question is where is it settle out The markets are discounting The markets are discounting
two and a half
DATE
And you know, we're coming down from six So, or higher on the core, right? So, but there are really
two
CARDINAL
big imbalances in the economy right now that are need to be resolved through this tightening cycle and we're we're still in this tightening cycle It's it's too early to really see the effects it hasn't been that long to see the effects and so chances are you're gonna get more that weakness as you as you go along. But there are there are
two
CARDINAL
big imbalances in the economy right now that that they're gonna have to To the output capacity of labor Over
the past year
DATE
, nominal spending is up
10%
PERCENT
. And incomes are up
10%
PERCENT
, and if incomes are up
10%
PERCENT
, that gets spent, and it, and you get more spending at
10%
PERCENT
. Yo, you gotta bring incomes down. And if incomes are growing by
10%
PERCENT
but labor can only produce goods at the rate of four% you get a
six%
NORP
inflation rate And that's the basic that's the first imbalance and that's the basic cause of the inflation that we have right now. It's really not the supply chain. It's just too much spending Which came from the monetization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of nominal spending in relation to bond yields. So nominal spending is even higher above bonus than it is above output. You know, seven, seven%, above bonus. So, it's the highest in
60 years
DATE
. So, if, if, if
Spanding
WORK_OF_ART
, if people's incomes are growing Well beyond bony yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit and so
Bony
PERSON
yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit so that the the credit numbers it is referring to loans up
11%
PERCENT
You know, that's a backstop. The economy and spending. So, so it's it's the high level of spending an incoming relation to interest rates and and labor, labor production, It's the availability of credit to sustain that and it and that all means that you have to get a tightening monitoring policy and it's sustained tight into monitoring policy to bring about an equilibrium. So, it strikes me to
Bob
PERSON
brought back to wages pretty quickly It's one of the issues here where did you say that's the hardest get your arms around where are with wages and that wage price spiral because in fact if we are gonna have continuation people are gonna wanna make more money they're gonna go to their bosses and say you need to pay me more Well Now, I really bearish So they're not gonna be happy if you have a CO one but your
Bob
PERSON
and I think about the same way. But money growth has been slowing for
about 18 months
DATE
. We'll talk about that because it was growing gangbusters for a long time. Right. But you're saying it's turned around. So, in the conventional way, you had the checks, you had quantitative easing in low interest And so money growth got up to
almost 30%
PERCENT
Which is Extremely fast and that's why you have the strong number growth. Now, with figures I got
this afternoon
TIME
on bank deposits, money growth is well less than five%. And so we've set up the mechanism for this novel growth which is way too fast to slow down but that's what has to happen and obviously, this is a really interesting thing. If it slows down, Come out of real growth or out of prices. If you have your
10%
PERCENT
normal growth which everybody can understand I think Right now it's about
one%
ORG
real and a nine% price right and if you go to say five% nominal Of what's the mixed in? Right Should that fix the inflation problem or at least take us a long way to fixing it Your total in an economy they're they're total sources of funds is your sources for spending and there are
three
CARDINAL
sources there's money There's credit and there's income, right? And so, when you get the tightening amount of policy, they're contracting money and that's absolutely right. The
first
ORDINAL
effect of a contraction and money is on asset markets. Because if you think about the printing of money by the by the federing of
the Central Bank
ORG
they print the money and then they go buy bonds or they print the in that money then goes into stocks so that money had more most directly effects of financial markets Credit more goes in to spending, right? Because you know, you take out an auto loan to buy a car. You don't take out an auto loan to buy a bond and the
fed
ORG
doesn't print money to buy a car. They print money to buy financial assets. So, so what you have is a push pull The contraction in liquidity from the central bank is a drag on the financial markets While they're expansion of credit And so you've got you got that work in both directions right now. Credits going up that sounds like it's good it's gonna spur growth but that makes Like that's actually gonna make me inflation Does a
fed
ORG
need the credit to come in. So, probably. So, in my view of it, which is a straight
Milton Freeman
PERSON
take of it. Of those
three
CARDINAL
pieces that
Bob
PERSON
point out The
first
ORDINAL
one is where it starts. Is money growth And I track global short rates. It's a global economy and they've a higher impact on the
US
GPE
economy than fed funds and they've been going up for
about 18 months
DATE
. Same time that money grows have been slowing. So, I think we're pretty deep in this and we had a pretty good drop in the stock market to your point And and now inflation's coming down. The markets are
Beginning
ORG
to think that this is Introduction.
To your point And and now inflation's coming down. The markets are Introduction to the next chapter That the next peel of the onion. Exactly right. So, the money is the
first
ORDINAL
thing, right? But what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent effects right which means Have to be in a tightening cycle for long enough for that to happen. Right? And we've been in a tightening cycle for how
many weeks
DATE
? Right if you look at global Exactly. You have to be in a long enough, right? And so, you know, as we look forward We think that there's there's gonna be it's too early to tell really how this plays out in terms of whether it's wheat growth or high inflation or which one but Probably gonna get some combination of wheat growth, high inflation, and rising interest rates. Right And all
three
CARDINAL
of those are are rough on asset prices Is gonna be determined mostly by how aggressively the
fed
ORG
. And other central banks tighten and and stay tight if they have to pay the price of a downturn. What are we doing in the meantime?
Bob Prince
PERSON
and
Ed Pimon
PERSON
will be back with us for more Wall St Week after the break. When you think of cutting edge technology at sea. You might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy. But could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. I'm from shipping. Output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement? To help reduce the emissions from these well stocked maritime hemis. New construction contracts faltered and while unemployment actually went down Significant was back to back
monthly
DATE
declines and paying jobs. The bottom line seem to be that the economy was beginning to move forward but with many are lagging part And overall at a pace that would embarrass a tortoise. That was
Lewis Rockets
PERSON
around Wall St wave back in
August of 1991
DATE
when
the United States
GPE
had just come off of a roughly mild and short recession the number
one
CARDINAL
song if your murder was
Brian Adams
PERSON
everything I do I do it for you and the top movie was terminated too judgment day still with her Bob Prince of Bridgewater and Ed Hyman have ever courage so it Bit of a different world
today
DATE
,
Bob
PERSON
. For example, on the job situation, we still have a pretty robust jobs economy.
Hey
Bob
PERSON
for example on the job situation we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are on the tightening cycle what comes next what does that say to an investor Well right now we're in that in between stage right now right so you if you if you go back just not too many months It it became evident that we had a self sustained inflation that there was gonna be a tight near monetary policy the market's priced that in yields went up You got to take me in a policy it's still happening it's not over
Marcus
LOC
got a little bit excited about the dip in some of the inflation. They started bite on that yield. But that we've already given up
half
CARDINAL
of the yield rise that occurred and that actually means the
fed
ORG
needs to do more than if the yields had stayed up where they were, right? Including equity. So, So we're still in this thing we're still in this tightening cycle And like I said there there are really there's gonna be a mixture of
three
CARDINAL
things and you don't know what the mix is yet cuz it's too early to tell but you're gonna get some mixture of wheat growth, high inflation, and rising interest rates. The more the interest rates rise, the more it's the wheat growth, Let's see interest rate rise the more it's the high inflation The
fed
ORG
takes the foot off the brake you're gonna that that inflation improvement's gonna go away and you're gonna you know they're gonna favor growth so you don't know which which how they're gonna play it quite yet. So what we try to do in this kind of environment is is maintain some balance, right? Diversification, obviously, don't Too heavily committed to anyone direction but also even within the equity market you know structuring equity portfolios that have AA cash flow and balance sheet base under them so that if if the tightening is very aggressive that there Strong enough balance sheet to hold that up to to sustain their their position in the markets or sustain a positive cash flow and I think that their companies that are you have a lot of debt in relation to enterprise value or vulnerable, profit margins, that sort of thing. You know, are they are the type that are Vulnerable for that environment. An awful lot hinges on the
fed
ORG
. Surprise, surprise.
Jackson Hole
GPE
coming up.
Next week
DATE
, okay? A lot of people are in paying attention to
Jay Powell
PERSON
. We used to say, remember,
last year
DATE
, at this event, he was talking about transitory still. That doesn't work so well
this year
DATE
, right? So, how much guidance can the
Fed
ORG
give us what exactly where they're heading? Well it's hard to hard to know I do think we're gonna get a financial crisis somewhere Pretty soon. Always been part of the of the tightening cycle But like you point out David.
Yo
ORG
,
last year
DATE
, it was really about transitory. He had
five
CARDINAL
Went through
five
CARDINAL
different things that would prove transitory And I I personally think the fit is now on the other side of the wrong foot. They're doing the entrenched and you know,
a year ago
DATE
, I thought
Bonnie
PERSON
is a go to five% and fed funds go to five% and I'm not quite sure what's happened but your money growth did slow dramatically And combine prices here and come down Dramatically and now I'm seeing pricing power coming down and so I think we've made a lot more progress on inflation than I expected and and that's why the market was going up until
today
DATE
but that's that's if inflation keeps coming Then the market is gonna appreciate that. Think I don't understand
Bob
PERSON
we heard why
Ed
PERSON
thinks the
fed
ORG
stop maybe he's got a bit easier actually with some of the things that have happened but financial conditions Have not tightened. Actually, if anything, do that in someone looser. That makes the
first
ORDINAL
job harder, does it? Now,
Literally
PERSON
the first quarter
DATE
that markets were doing the
Fed
ORG
's job entirely. Yeah. You know positive signs inflation you know they actually pull back and so bonus came back down equity yields you know came back down And so You know that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted If if you.
So You know that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted If yields had stayed where they were It would be that much less that the
fed
ORG
needs to do but the fact that the yields have actually dropped some and can kinda give him back some of the work that they were doing. It's that much more that the
fed
ORG
needs to do. And so I think you know it's into Referred to last that you know you you raised it and then you know we
Last year
DATE
Jackson
GPE
. Yeah. They were clearly wrong about transitory inflation if if you actually look at the indicators that they follow and they tend to be lagging indicators I haven't heard yet an explanation about how they think inflation, why they think there is an inflation, why they think that that was wrong, and I think that that causes some cause you to question The the how well this this process is gonna be manage is gonna be very tricky. Powerful point I think does the
fed
ORG
need to explain to us what went wrong and why they're not gonna do a mistake again for us to really believe in this time. Oh be helpful. But you know from
Vanish
NORP
point as you can see What they missed was that fiscal stimulus quantitative easing led to a
30%
PERCENT
increase in the money supply and that did it If you look back at that
Jackson Hole
FAC
they completely missed that And my prices are coming down all sorts of signs that are early signs and so the job is not over by any means. But there's progress and if you look back like pickate the 70s when inflation peaked The stock market started to respond to that. When you had a very high inflation period, like we have now. Do you agree with
Ed
PERSON
that in all likelihood we'll have some sort of financial crisis? So that's what happening happens in serious tight I'd Odds are pretty good, yeah. Yeah, I mean, we haven't had enough taking down to really have that Odds are good. Yeah. I mean, we haven't had the downturn yet. If there's gonna be a downturn, it hasn't happened yet. It's gonna be hard to bring inflation down. Gonna bring nominal spending down from
10%
PERCENT
to five% Without a significant An incredible you need to slow credit growth by
about half
CARDINAL
money growth is slowed but you need to slow credit growth in
half
CARDINAL
but it's still rising you're gonna have to you're gonna have to hold interest rates up enough and that's when thing that's when bad things happen Thank you so much. Coming up, we'll take a look at what's coming up
next week
DATE
on global Wall St. That's next on Wall St on
Bloomberg
GPE
. No one covers the world like
bloomberg
PERSON
. In
the coming months
DATE
do you see that coming
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. This is
Wall St Week
ORG
. I'm
David Weston
PERSON
. Let's take What's coming up next?
I'm
David Weston
PERSON
. Let's take a Starting with Julia
Sally
PERSON
in
Singapore
GPE
. Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan prime rate also on the
Slater
PERSON
interest rate decisions from central banks in
South Korea
GPE
and
Indonesia
GPE
inflation figures from
Singapore
GPE
and
Hong Kong
GPE
trade data Earnings across the region include
Qantas Petro
ORG
China
GPE
and food delivery giant meat
one
CARDINAL
Bloomberg
PERSON
intelligence forecast
Chinese
NORP
companies may be set to report their worst earnings The focus in
Europe
LOC
for
the coming week
DATE
will be the energy crisis in
Europe
LOC
and we have a lot of developments in
the week
DATE
prior you had the
Ryan
PERSON
dropping to levels that made it untenable to have shipments across it you had record high energy prices in
France
GPE
and
Germany
GPE
you also had
Matt Gaps
PERSON
prices New records as well. So, as we head into
this week
DATE
, the question is going to be, how will this impact industry? How would impact individuals? Will there be more demand rationing and demand destruction? We've already seen some of it with different industry having to shut down power plants but how much worse can it get and what will be the impact on the economy? Big weekend economics we have the
Jackson
GPE
wholesome posium coming up and I think our
Bloomberg
GPE
economics team really focused to hear some hawkish comments from chairman
Jay Powell
PERSON
reassuring the markets there was no
Dovish
NORP
pivot and that we are still ago in
September
DATE
for
50 or 75
CARDINAL
basis Away from economics back to some of the fundamentals as well.
Big week
DATE
for earnings too. Zoom of course the video conferencing company. How do they sort of continue to grow in the face that further reopening trade maybe less demand for that product? Finally peloton. We've heard a lot from this company about Some of the bikes at home, a lot of cost cutting initiatives, all the help sort of get that company back on track. That too will be a key focus for us
next week
DATE
. Thanks to Julia
Sally
PERSON
,
Danny Burger
PERSON
, and
Taylor Riggs
PERSON
. Well some of those who maybe caught are those so called zombie companies who've loaded up on debt when it was cheap. International finance. That's next on Wall St Week on
Bloomberg
PERSON
. Hey Facebook crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs cure. For something Universally important to human life as sleep. Mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding.
Seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding It's easy to memorize things that makes you smart if you can spit back a lot of facts but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what you bring figures out while you're sleeping. Crypto Have a world of young people. That one their own financial system. And their own culture. And it is very powerful. And I'm a big believer in it It was nice while it lasted all that support from the
fed
ORG
from oh interest rates. Range. Enabled in large part by the financial backing from the
congress
ORG
and the treasury we will continue to use these powers forcefully proactively and aggressively until we're confident that we are solely on the road to recovery. All of which allowed companies to Leverage which we've seen over
the past 3 or 4 years
DATE
is that sustainable But now those happy
days
DATE
are over as the
Fed
ORG
has reversed course and says it will keep raising rates until the inflation dragon is slain the idea that we are going to start cutting rates
early next year
DATE
when inflation is very likely going to be well well in excess of our target I just think it's not realistic Leave all those companies who borrowed so much. Well, at least some of them are so called zombies. No not those zombies companies that don't generate enough cash to pay their debt and that leads economists like neuro
Robini
PERSON
to say we're going to see some of them fail which may just be what we need to get to the other side
Zombie
PERSON
Oh rate negative rates Using now that the weather can tighten Inflation is higher that zombies are gonna collapse. And to take a series of strange and exotic world of zombie companies welcome to
Sonia Gibbs
PERSON
she's managing director and headed sustainable finance at
the Institute of International Finance so Sonia
ORG
thank you so much for joining us on Wall St Week let me start with those basic questions what exactly is a zombie company and how many Them are there out there
First
ORDINAL
of all, to take a step back. What you need to think about is that over
the past 10 or 15 years
DATE
, global debt levels have skyrocketed. We've had very low interest rates and for example, non-financial corporate debt around the world is now close to
100%
PERCENT
of GDP. More than double what it was
a decade ago
DATE
so that's a very worrying backdrop And so what we mean by zombie companies is a company that essentially has to borrow to keep going they're highly leveraged they're not growing very fast they're revenues are not up to par and at the moment they face a very difficult situation you've got higher input costs so your commodity prices are higher Ages are rising at the same time you don't earn enough revenue to cover all of these higher costs and your debt service so if you have a ratio of revenues to interest costs that's
one
CARDINAL
or less if you can barely cover your debt service cost we call you a zombie company and it's Good name it's very evocative And for how many it means difficult to calculate right because for a lot of firms that for example art publicly listed the information might be less available it might be smaller non-public companies but
Right because for a lot of firms that for example art publicly listed the information might be less available it might be smaller non-public companies
The Federal Reserve
ORG
estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
firms fall into this category. It's also important to remember that this is not a static world. It's not once a zombie, always a zombie. Conditions change and in fact, becoming a zombie company is a little bit cyclical in the sense that when times are good, maybe interest rates are low, growth is high, maybe you're not a zombie. But then, you know, bad things happen. Pandemics happen. Shocks happen. Interest rates go up And a company that was formerly doing reasonably well Might suddenly fall into the zombie category. So so you mentioned the overall debt load it's true certainly in
the United States
GPE
and not just in
United States
GPE
and part because interest rates are so low there's some very very successful healthy companies that loaded up on debt cuz it was so cheap but and whenever we've talked about this risk in
the last few years
DATE
I said don't worry as long as interest rates are low we're fine it looks like those days maybe on their way We're gonna have higher interest rates. So, what kind of pressure is that put on these zombie companies? Well, I think it's a good analogy, right? It's all fine until it's not and so you've had AA kind of a confluence of factors that have hit pretty much at the same time. You had a pandemic which hit growth. You had commodity price shock. You have writing inflation. You have Interest rates and you also have firms who's who's business models. For example, have been entirely changed by the pandemic. I mean, amongst the list of zombie companies, you might find a company like
WeWork
PERSON
, you know, a company that has been very successful but at the same time, the pandemic has changed a lot of things for that for that company
Carnival
ORG
cruise lines. There's another good example of a type of company who's now in the zombie category or some of the meme stocks. You know,
AMC
ORG
, your game stop. So, these are really household names and I think that the difficulty is at a point in time when you've got wages rising, when you have higher input costs. These firms Be able to borrow as much as they need to borrow to keep afloat. Zombie companies concentrate in certain sectors or in certain size corporations? I think it's fair to say that the the sectors that are worst off in terms of percentage of zombie firms are probably in manufacturing and in retail and retail of courses in industry that's undergoing secular change over the long term as we move to sort of more online no less brick and mortar think there are there are underlying structural issues there and in
Sector
ORG
. In any case, but I think some of the companies that are hardest hit tend to be smaller firms. And if you think about a small company, there's sort of inherently face greater credit risks than some of the larger, better established companies that have long standing histories and track records in borrowing. They're you know Familiar to investors smaller companies have a harder time accessing funds especially when when borrowing conditions are are difficult and with some of these companies having fallen on hard times during the pandemic you know there are estimates that suggested in some cases
as much as 25 30%
PERCENT
of the small Companies especially if you include unlisted companies could be falling into this sort of zombie trap I wonder saying about the larger effects on the economy. Obviously, we don't wish ill for any corporation but there's gonna be a lot of stress, put a lot of the companies you're describing right now. And so far is that all gets sorted out to use a euphemism perhaps? Is there some benefit for the economy and redeploying the capital they represent into things that might be more productive than their I think we might wanna think about this in a short term and a long term context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here which has spent over
800 1 billion US dollars
MONEY
since the pandemic hit to support its companies so you avoid bankruptcy, you keep people employed, you keep these company the float, but there's Longer term cost to be paid for that because when you think about it It's being spent to keep zombie companies afloat Is money that could be more productively deployed elsewhere. You could
When you think about it money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere you could put it into capital spending you could put it into infrastructure you could put it in a new industries new technology is maybe in the ESG world or or green That can really deliver a boost to productivity and growth. So it's kind of a foregone opportunity in that sense. Sit down for the reason you describe in the example of
Japan
GPE
is a good one. It strikes me. There are political consequences of letting zombie companies go belly up. You know that the politics of these things are are always difficult, right? I mean one of the the conclusion is that you can come to is it if you have a high proportion of of zombie companies if you have companies that you're worried about keeping a float there's political pressure to keep that going. The more that borrowing cost rise, the more the interest rate rise, the harder time these companies will have keeping going. So if you're in a world where inflation is rising and you have central banks having to make a very difficult balance Controlling inflation and supporting growth which can involve supporting some of these less profitable companies. You know, it's a it's a it's a rock and a hard place. You know, where do where do you draw the line? On you if in fact the
fed
ORG
could have been held responsible for this may be company and maybe it's not what they're intent but it's certainly was a consequence of extraordinary low interest rates for a long time. Oh I think ultimately has arbitraries of the price of money you could hold the
fed
ORG
responsible for everything really but certainly it was an inadvertent consequence Of low interest rates. So I mean if you think of the the many many years when we had low and in some countries even negative interest rates there were warnings sounded all the time. There are risks to financial stability. There are risks to long term growth. It's going to stoke inflation. It's going to distort financial markets. Is dis Asset valuations And in fact, you can think of zombie companies as a type of distorted asset valuation, right? Because accompanying a bit cannot generate enough revenue to support its debt service and it's running costs. Arguably, is trading at an inflated valuation because it can continue to borrow at low rates. So,
Sort
PERSON
of put it on the backs of central banks but it's it's certainly an inadvertent consequence of something that had to be done Growth going during the the after the financial crisis. So, thank you so much for that. Tour of the exotic world of zombie companies. That's
Sonia Gibbs
PERSON
. International finance. Pleasure to be here.
Larry Summers
PERSON
of
Harvard
ORG
. This is Wall St Week on
Bloomberg
PERSON
A lot of the satellites have propulsion systems. They can kinda move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a Subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a clouded debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up
The collision This is Walsh St. I'm
David Weston
PERSON
. We're gonna wrap up
the week
DATE
once again with our special computer,
Larry Summers
PERSON
of
Harvard
ORG
.
Larry
PERSON
, thanks so much for being back with us. So, let's start with those fed minutes that everybody was waiting for eagerly and they came out The markets didn't know quite what to do with them what did you make out of those minutes They confirmed what I suspected Which was that the
Fed
ORG
doesn't know where it is That the world is very ambiguous at this point And A meeting or a very poor way to convey
Collective Look
PERSON
the
fed
ORG
has a fundamental problem About which it is not yet willing to be realistic And that is that it is exceedingly unlikely That inflation can be brought down to target levels Without a substantial increase in unemployment they To be very concerned about unemployment and about inflation and the reality is that it's probably not so realistic to think that they're gonna get All the way down And they don't wanna acknowledge that and that forces a certain confusion I into all of their statements I can sympathize and understand why they don't want to acknowledge that part of the problem is they've taken on an excessive obligation To communicate So I think they're in AA very very difficult situation I don't know to what extent they're gonna choose to take the pain that is ahead They're gonna choose to take it on the flation Side Remains to be seen They don't really know Hey there which way it's going to go That Materially looser Than they were when the
fed
ORG
last met. And Middle of a tightening cycle Substantially loosening Has to make a central bank nervous David there's
one
CARDINAL
other aspect to this situation that I think is very important and under recognized What's happening with
Russia
GPE
and
Ukraine
GPE
what's happening with droughts all of it they don't really fully fully internalize that oil prices and wheat prices have both come down substantially at our predic Substantially in the future. Concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that when headline inflation is lower Then I inflation With respect to core inflation Median or trimmed mean Measures And so I think we've
Median or trimmed mean Measures Substantial Inflation challenge ahead of us. One of the things that
fed
ORG
emphasize in the
minutes
TIME
besides really being concerned about inflation expectations on the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your take of the housing market. Some people say we're in a housing recession right now. I think you have to distinguish
Movers
NORP
from stairs or to put a differently you have to Look at you have to think about what the right way to look at rents is. Here's what's true What's true is that last year People who were signing new leases We're paying
15 or 20%
PERCENT
more than they had
a year ago
DATE
. Nothing like that Fatty into the consumer pricing decks or the feds preferred measures
PCA
ORG
index All the fed through The small fraction of people who saw their rents change And a constant rent for everybody else. What that means is that down the road like now You're seeing inflation Substantial increases and so we're gonna see Housing price inflation in the measures of inflation that are used For
another 6 to 9 months
DATE
that's a different thing than what builders are responding to builders aren't responding to that builders are responding to what they think the price of houses will be
a year from now
DATE
and that come down and Building and that's what happens when interest rates go when interest rates go up in some ways it makes sense if we're gonna have Economic activity It's better to have a decline in something where we've already got a huge stock of it and it's only the new flow that's being affected Van in Continuous basis Doesn't have any duration to it But I do think we're Towards Respect the housing and I'm sure they'll be differential impacts in different parts of the country as I say my best guess is that we will have a meaningful recession sometime in
the next two
DATE
With respect to housing ahead. We certainly saw that in numbers coming out of
China
GPE
at
the beginning of this week
DATE
and I wonder what you make of the
Chinese
NORP
problems as we know there are
three
CARDINAL
or four in their inner lock there but on the other hand is it possible that we'll give a little at least a little relief to Inflation Probably will it it goes back to the issue we discussed
a few minutes ago David
TIME
about oil prices and grain prices
Main
ORG
impact of
Chinese
NORP
slowing is likely to be on commodity prices and there's a question as to how much weight those should be given as we think about our inflation rate In this country but it probably is a positive on inflation. I think the larger questions How we see
China
GPE
in the future and how
China
GPE
will be responding to these economic These has i've been saying.
China
GPE
in the future and how
China
GPE
will be responding to these Increasingly profound events in
China
GPE
It was taken as almost axiamatic At some point the
Chinese
NORP
economy would surpass the
American
NORP
economy Of total GDP at market exchange rates. Much less clear than it previously was. And I think you're seeing all kinds of challenges, for
China
GPE
. There's the huge financial overhang. There's the where the growth is going to come from. There's the growing communist party involve You know, wider range of enterprises. There's the demographic I have been saying for some time that I think people are gonna look back at some of the economic forecasts about
China
GPE
in
2020
DATE
in the same way they looked back at economic forecasts for
Russia
GPE
that were
1960
DATE
or for
Japan
GPE
that were made in
1990
DATE
. Last one here. Toward
the end of the week
DATE
,
turkey central bank
ORG
made a move to try to combat inflation by you won't believe this cutting the interest rate from
14 to 13%
PERCENT
. This of course is part of President What did you make of that? President
Erdogan
PERSON
is the world's first Monetary theorist. He is putting modern monetary theory into effect So far it hasn't worked very well For him Or for the
Turkish
NORP
people I don't think that's going to turn around And I hope that the misguided accolades of modern monetary theory in
the United States
GPE
are watching. Okay Lori thank you so very much that's
Larry Summersville Harvard
PERSON
are very special in trader here on Wall St week. Coming up, we all know getting older makes us slower and grayer but can also make us richer. That's next on Wall St Week on
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Finally,
one
CARDINAL
more thought. Getting old. It's one That we all have to do None of us wants to think about it And sometimes seems like some of the oldest among us may be the deepest in denial where there is rock musicians like Still performing live on stage at
the age of 79
DATE
or sir
Paul McCartney
PERSON
who's still going strong way past that age of 64 he wants worried about or are political leaders in or nearing their
80s
DATE
Paul McCartney
PERSON
who's still going strong way past that age of 64 he once worried about or our political leaders in or nearing their
80s
DATE
like President
Biden
PERSON
and
Mitch Final
PERSON
and
Nancy Pelosi
PERSON
who snapped back and reporter
10 years ago
DATE
when asked a question. College privately say that you're just getting to stay on And who can forget President
Ronald Reagan
PERSON
who in
1984
DATE
provoke the age old or should I say old age question after Tumbling through his previous debate with
Demo Only
ORG
to come back with this zinger. I will not make age an issue of this campaign. I am not going to exploit for political purposes. My opponents, youth, and inexperience. The world of business in
France
GPE
is an entirely immune from this but by
Warren Buffett
PERSON
who at
91
CARDINAL
shows no signs of stepping down and told our own
David Rubenstein
PERSON
his goal is to keep Quite like to be the oldest man that ever lived actually. And who knows maybe Really just get older. We get better. Those was hoping that that may just be true. We now have a concrete, provable example, coming from the world of golf, where a journey and tour professional who'd struggle for
years
DATE
, suddenly became a star, simply by turning
50
CARDINAL
Pushing him into the older player PGA tour champions league to be sure
Stephen Alka
PERSON
from
New Zealand
GPE
happened to be at the very According to
the Wall St Journal
ORG
adding that extra year has let him to make in
1 year
DATE
$
three
MONEY
.
5 million
CARDINAL
which is more than he made in all the rest of his career put together And if he keeps sinking extra long putts like he did to win the bowing classic
Bloomberg
PERSON
see you
next week
DATE
.
Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
this group has broken by
Bloomberg
PERSON
's
Amanda Companies
ORG
know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that soft
Robot
PERSON
is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. For the
FTC
ORG
, I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
Custom to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
EVENT
? Mobility so we have flick to switch there and really we're going to step by step electrify everything And what does that mean? Deflation is a terrible thing. Inflation you could tower.
Rainfall
GPE
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm
Francy Laqua
PERSON
welcome to
Bloomberg Front Row
ORG
and there are
Chel
PERSON
is a tighten of
European
NORP
banking at
UBS
ORG
he transformed the firm's investment bank he's now the chief executive of major
Italian
NORP
lender only credit over the course of his career or Chall has had to navigate numerous crisis and now is
Different
ORG
. Rampant inflation and aggressive central bank tightening. Inflation is biting We see for low income or lower income families Really difficult to deal with a rising cost of energy. The
Italian
NORP
has also faced personal challenges recently including a dramatic and public legal battle with
Santander
PERSON
over the robot attempt to hire him as chief executive. I will always be sorry for how it went this is another bank I admire a lot and that hasn't changed I think for me More about The facts. It was obviously an emotional roller coaster. From a family standpoint it was quite impactful.
First
ORDINAL
TV interviews since becoming chief executive we talk about his new role at
Una
ORG
credit the impact of the war in
Ukraine
GPE
the challenges of being
Europe
LOC
's bank and that sent under the backle
Andre Orchel
PERSON
thank you so much for speaking to
Bloomberg
PERSON
so you've been in the job just over a year was it everything you hoped for more really much more yes not stressful Stressful but i like stressful I think that what has been great
this year
DATE
is a way you create it Really welcome to me into the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision, a new strategy, a new direction, Ready to commit and own the future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleepy bank? No but I looked at it more from the perspective of the banker numbers What needs to be done or is the value where it's not the value But when you arrive, you see the people and that makes the whole difference. So, that's what what makes it more emotional, I guess, is this like totally? Ask me once what what keeps you up at
night
TIME
? Well, the emotions are now very engaged And you feel a duty and a commitment to the people who are looking up at you to to take that ministers and direction And that I think puts a lot of weight on your shoulders.
Russia
GPE
is
one
CARDINAL
of the top
three
CARDINAL
in
Europe
LOC
. How do you deal with the employees in
Russia
GPE
with your subdrian
Russia
GPE
? Well,
first
ORDINAL
of all, for us, it's important to understand that We have to remember that
95%
PERCENT
of the bank is not in
Russia
GPE
. No And we cannot commit the mistake of spending the entire time on
Russia
GPE
where our emotion and the shock that we have taken Is probably driving us to do. So what we have done is we have a situation room that is fully committed to do that. We've all the skill sets but we need from legal to tax to accounting to everything else. And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation When I look at
Russia
GPE
separating it there are
two
CARDINAL
orders of effects that we look at. One is a direct shock from our exposure to
Russia
GPE
. I think that in
the last 2 months
DATE
There are
two
CARDINAL
orders of effects that we look at. One is a direct shock from our exposure to
Russia
GPE
. I think that in
the last 2 months
DATE
We have a chip to reduce it meaningfully by
about two 1 billion
MONEY
. We've done that actually. The team has done a great job without that costing the bank almost anything which was not to be expected. And at the same time we have understood very well and in a granular way what the risks are And we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the further effect from a degeneration of that situation. The provisions were quite large and the market took it quite well. Is that how Describe it I think so I think we what we did is during those 2 months we were able to articulate In a detailed way what is our extreme lost scenario for
Russia
GPE
? Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact. Do with this unit? Are you frustrated that you kept you keep on getting asked? Over and over. What will happen to to
Russia
GPE
and the employees there? Well, I think that anyone who has a large presence in
Russia
GPE
or significant presence in large in in
Russia
GPE
is being asked it's normal. I think we'd be least strongly that Let us show you what we execute and let's talk about it then We have a number of options on that we could pursue Very much affected by the next wave of sanction Who have a counterparts what we can do what we cannot do And at the same time we should not forget that we do have 4000 employees in
Russia
GPE
Have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
are actually
Europeans
NORP
who are trying to go through the same thing that we're going through as a bank which is deal with a situation the best way possible. Do you have a preferred And actually is there a situation where you just say we need to get rid of it. What do you say to the critics? Let's say
Andrea
PERSON
you should have gotten rid of this. For the cost. I think I review is Number
one
CARDINAL
my preferred route is not necessarily root but can I can be executed in the same way that we have given detail of how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for successive ways of sanctions that have closed the window on who we can deal with What transaction can we do and in which timing
Vaseem
ORG
applies to our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions that we have and by who are our counterparts. We believe very strongly that If we want to be consistent with what VU has decided We need to consider all the options in a way that they reflect fair value because this is a primary objective for Providing. Right. Too much value to accounter part. Let's put it this way. But he's not justified and at the same time balancing what is leading the best interest of our stakeholder and investors. How worried are you about inflation about the cost of living? You're so tied to the
Italian
NORP
economy. And this is an economy in terms of energy, in terms of also exports and imports That's
one
CARDINAL
of the most closely linked. We are tied to the
Italian
NORP
economy We're less than people expect because we are
about 40%
PERCENT
of the bank I think in
my first year
DATE
of operation being tied to
Italian
NORP
economy hasn't been great Good gross good dynamics stable direction of travel. Is that the driving effect? Hey Facebook drag effect. As we look forward Be a deceleration. We have
two
CARDINAL
central scenarios for ourselves.
One
CARDINAL
is a
Slow
ORG
down. And the other one is a depression. At the moment, we see a significant slow down as the central scenario although Has not been affected at all basically over effects beyond prices. So what we're seeing is inflation being the precursor of more. Inflation is biting We see for low income or lower income families.
Cursor of more. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising custody of energy. We also see But for companies that had investments or that were dependent on energy or on grain to certain extent the whole value change has been completely alright Destroyed and so they need to reassess what is their position Change for sources Redesigned their models But at this point in time this translate You know slow down I've investment. We haven't seen anything else. We do believe that going forward it will be a lot more disruptive. Tag on the product may read made in the
USA
GPE
but the
Often
PERSON
says made in
India
GPE
.
Alphabet sun
PERSON
darker
IBM
ORG
's
Irvin Krishna
PERSON
micron technology
Sanjay Mayhotra
PERSON
and that's just And that doesn't count
Indians
NORP
running companies all over the world. Incredibly competitive education system if you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make up about
Visas
GPE
for the
US
GPE
and it's Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Do you worry about a policy mistake from the ECB if if you have this possible recession or environment They don't raise rates. What happens to inflation and what happens to all of your
Italian
NORP
clients or
European
NORP
clients? Well, it's a very tricky economic environment for ECB but also in the
US
GPE
. Because on the one hand, you have inflation but the inflation is generated by your specific segment of the economy. A energy I'm not that sure that raising rates a lot will cool that down because it's very concentrated and it is linked to a dislocation between a friend demand The rest of the economy however We all agree that he's slowing down and maybe tilting into recession Rates Issue. So, it's very, very tricky to manage and yes, we'll concern to finding the right balance. I think that getting to more neutral stance towards the oh is probably The moment you go up a lot from there it depends very much on what the rest of the academy is doing. Between
Italian
NORP
B
two
CARDINAL
How much of a warrior is that? Well, you always have a bit of that every time that there is a crisis there is a so-called flight to quality and that happens. I think that like for many other things, we need to see how old the economies of
Europe
LOC
are gonna perform in fact During this this environment And I think what I was standing in Best was the other day is if you look at
Today
DATE
. We are
5 months
DATE
into a year You do not see any deceleration of the economy You seem flation, you see a rising rates, you see some very worrying sign You anticipate a social and an economy impact from the war but you're not seeing yet. That kind of degeneration that the market is expecting. What is the market looking at? I mean, this is like the market seems to be all over the place. We could be up. We could be down.
That kind of degeneration that the market is expecting. Looking at. I mean, this is like the market seems to be all over the place. We could be up, we could be down, or we living through a correction. Well, I think I've, I read, an interesting report from one of the That covers us but we'll remain on named here but but was asked to do a parallel between environment of
today
DATE
and the 70s on inflation Which tells you what kind of mood Worry exist out there Personally I don't think it's gonna be that extreme because I think there are a number of amortizers I mean if you look at the facts
Italy
GPE
has managed to Tribute or re Change the average in of its energy to a significant extent of its value change so we now go to Another places to get a lot of a gas or we will be going if you look at
Poland
GPE
they have found a way to deal with
Norway
GPE
if you look at
Bulgaria
GPE
they connected their pipes towards
Greece
GPE
and the guests that are rushed from there so
Europe
LOC
is adjusting The question is how much time there is but
Europe
LOC
is adjusting. Kind of earthquake way because you could see if there's oil and gas and bargo from
Russia
GPE
what happens to this continent? It depends on timing.
VC
PERSON
's that's why the The economic environment that we're looking at it depends on timing and extend of the Breakage away from
Russia
GPE
and to a certain extent from
Ukraine
GPE
If that is done very fast and completely As you said the impact will be quite dramatic Significant longer period of time the impact will be less dramatic do we have? A significant alarm period of time. I don't know. But that is the key. And we always talk about gas but we also need to understand our dependence on our commodities.
Palagiam Lithium
PERSON
a whole of other things that the entire value chain was predicated on connections with
Russia
GPE
and
Green
PERSON
's connections with
Ukraine
GPE
If that changes from
1 day
DATE
to hour the shock is very high. You were talking about a political stability in
Italy
GPE
. We were joking about the drug. Do you worry that actually politics and it so he has always been quite messy that this political instability comes back and hurts your bank? Well politics in
Italy
GPE
if you're
Italian
NORP
and
Italian
NORP
or politics in
Italy
GPE
but
Italians
NORP
have been able to go through it And A lot of trust in the country and and I believe the country has In a certain way And in a way I am much more nervous about the more general impact on economy in
Europe
LOC
the more general social impact on the on
Europe
LOC
immigration things like that that are going to touch not only
Italy
GPE
but the broader continent. How much do you like taking care of risk? So I wanna talk about a little bit about what Inside uni credit. Do you feel like you're a risk manager? Is it about also cutting costs? So, how do you, you have one of the most generous plans actually for investors out there? How will you stick to it? Well I think
Stick
FAC
to it I think We have said very clearly that we felt that the execution of unicorn unlocked would yield to a certain level of profitability A certain level organic capital generation based on that We could have very generous. Yes. Distribution to our shuffled. Was that pretty
Russia
GPE
? That was pre-rush. So Actively the plan anticipated that our capital will remain stable through the period at the top end of our peer group and that we would distribute only the access capital we would generate
every year
DATE
. So, in in that way, it is prudent. It is coordinated to us executing the plan and all of his slavers at the same time because of where we're coming from There is a lot of value to be created so that is what generates Vision that we have Then we get to the invasion of
Ukraine
GPE
. At the moment.
It to be created so that is what generates the distribution that we have Then we get to be invasion of
Ukraine
GPE
At the moment what we have done is we have changed our macro scenario reference from what it was before to slow down. From GDP standpoint it brings
about two to two and a half
CARDINAL
points less surgery because when we were anticipating from an inflation standpoint it takes to a couple of percentage point more inflation than we were anticipating with peaks in certain countries obviously In that environment We can still execute let's say the unicorn lock plant as it is if we keep our eyes on the ball and execute as we should be because on a way the GDPD celebration is in part compensated by higher rates which are good for banks like like When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful. From Tina shipping is the key component of global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. Of all the world's this huge
Three%
GPE
be not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? Had
one
CARDINAL
of the most colorful careers. I don't know if that's the right way to describe it. I don't know how you would describe it. It's really in
the 5 years
DATE
It's not been dollar boring following your career moves do you feel vindicated that you were awarded that amount of money with what happens on time there I think the I will always be sorry for how it went this is another bank I admire a lot and that hasn't changed I think for me it was more about Confirming the facts The truth about a new existed And that has been done and it's on controversial. I mean, you will find it black or white. Through the process that has happened That for me was very important because a number of stories were were written at the time. What happens then I mean obviously something there has appealed we'll see But for me the important point was that The truth is very facts are there and at least mentally I have moved on.
68 1 million
QUANTITY
without never starting a job but also to try and understand what labor laws and everything like that works. Do you think it's changed? The way we look at banking walls and Don't know if it has changed what I know is that we shouldn't forget that Banking is a highly regulated industry as a as a result of that senior jobs have a very large component of deferral in their compensation. Invite your kids
7 years
DATE
And
more than 50%
PERCENT
if not
16
CARDINAL
certain cases of your compensation is deferred over
7 years
DATE
. If you do the math that means that at every point in time you're gonna have
between Four X
CARDINAL
of your compensation Deferred. Ehm but it's just index to the shark.
At every point in time you're gonna have
between Four X
CARDINAL
of your compensation Deferred. Ehm but it is index to the share price of the bank where you are and if it goes up X becomes even more. The difficulties when you change organizations. What do you do You either have the new organization that That Deferral Or you don't move Because of in effect that deferral is your entire savings So, I do think that although these are large numbers, I need to be put in context of how they got there. Usually in most cases in all cases
Organization
ORG
who has Assumes that liability. So, that number is liability and deferral. Is plus if you ever thinks that occurred because of a case but that is what it is. It was an emotional roller coaster. Is it something that you've put behind or is something that you don't think about? Well, at the beginning, it was obviously an emotional roller coaster. From a family standpoint it was quite impactful and I think personally given the esteem ahead for that bank it was quite impactful I think the the important point was I Once I went through the preparation of the case I detached and left other people deal with it and it was quite fortunate that those people were excellent And then I trusted the process a lot of people told me not to trust the process but I did
Anything
LOC
ended up being worsewall. And they're talking me a little bit about your working from home policy. So do you think COVID has changed everything? Is it problematic for a bank to let people work from home? Let's say that what COVID has done both from a standpoint of clients and for the standpoint of employees is More remote
Aisle
PRODUCT
. Flexible. I think that is not a bad thing. I think it has taken away FaceTime To a certain extent I believe strongly that being at work is important That's how you establish the culture. How you train people How teams can interact with each other and brainstorm and come up with a good idea. On the other hand and we had started to do something similar to
UBS
ORG
at the time you need to give people the flexibility to organize their lives and you cannot say it's
nine to five
CARDINAL
or it's whatever it is and that is it. So if you allow that flexibility for people Organized their lives and you've been need to take a
Friday
DATE
morning And then see the soccer match of their children And then work longer on the
Friday
DATE
evening
TIME
That's their their choice but I don't think you can replace
Brainstorming
PERSON
teamwork. You know, if you look at the agile way of developing our new our new initiatives around IT. Come from representative from business, technology, compliance risk, all being in
one
CARDINAL
room, and instead of saying you do pieces, how do we resolve the mortgage product? You can do that in the office. You can do that remote. Talk to me about attracting talents. Would you, do you worry about, you know, some of the bright, young minds going to. JP Morgan Goman Sax because they pay more. Would you worry about them going to crypto or Google because it's exciting. Well I think what I have found is that the bright minds As attracted by money as they are and probably more by
Version
PERSON
. What's the challenge? What do I learn Is this company doing things that I am proud of Care for the environment. Do we care for the communities? Will I be followed in my career and develop which is why we just launched the university These things especially in
the early years
DATE
Quite a lot of space in their decision As they move through And they come in and they move through when what takes places how do you treat them how do you track their career manage their career do you give them opportunity that's why I think we are very fortunate that you try it
Remove fruit when was thick spaces how do you treat them How do you track their career manage their career? Do you give them opportunity? That's why I think we're very fortunate. I can have a young person from
Bosnia
GPE
who start in the leading back in
Bosnia
GPE
. Does a tour into
Germany
GPE
Serbia
GPE
and then A skill set that has been refined goes back and it's a bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction but we have. Would you like most about being to the executive? Trying to make a difference I have been told by many people that no you know this cannot be done or this is difficult this is a little bit my chance to try and do what I think I it's right What I think it's right is usually I get it from talking to people who and if I can make a difference to Uni Credit and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And I helped What are our principal what we stand for? I think that will be a win. Chief executive job came up? Would you be up for it? I love you and create too much. Thank you so much. Thank you,
Francine
PERSON
. Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure for something Universally important to human life as sleep mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our It's easy to memorize things that makes you smart if you can spit it back a lot of facts but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what you bring figures out while you're sleeping. People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money at the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. BSO now is your online home for
weekly
DATE
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ORG
and
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ORG
performances see new concerts that go behind the scenes plus a claimed art carnival concerts visit
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ORG
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Bank of America
ORG
So, this is a lab. Yeah. Flex line. Where they come in.
First
ORDINAL
, it's just the body. That's what I call it. The body of the vehicle. And then that's a pieces that have to be assembled. Put together, tested. Now, I'm told you're not building a quote unquote car. No, I'm not. Don't say the word car. It's a vehicle. Huh. Yeah. It transportation vehicle. You arrived in this vehicle? Can we get in? Of course you can. Okay. There it is. Okay. So, comfortable. What? We don't want you to think about driving. This is why it's not a car. On
the Zukes Factory Floor
ORG
CEO Aisha Evans. Long range where she says they're not building a car but transforming ride hailing as we know it. She went from
Senegal
GPE
to
Silicon Valley
LOC
chasing a career in technology where she could have a global impact after
12 years
DATE
as a top ranking executive intel
Aisha
PERSON
For $
one
MONEY
.
2 billion
CARDINAL
. Joins us now for a look at the road ahead on
Bloomberg Studio
PERSON
100
CARDINAL
. Aisha. So great to be here with you. Thank you for coming and thank you for having me. Came to Zukes as CEO in
2019
DATE
over from
Intel
ORG
Just a year later
DATE
you sold it to
Amazon
ORG
. How did that happen so quickly? It was a journey. It takes a lot of capital to take this endeavor all the way it's it's a worthy one When we looked at the ecosystem when we looked at everything that was going around we had to decide whether to stay private or whether to get a long term oriented partner like some of our fellow travelers Then the pandemic hit that brought a lot of clarity shall we say? And so the opportunity presented itself and we we went for it. Why is
Amazon
ORG
the right fit?
First
ORDINAL
of all there are great company They have created both organal and adjacent
multibillion dollar
MONEY
businesses There are long term oriented Very purpose driven so That matched our ambitions. They've never owned a car Yeah but we're not a car company. Exactly We're a raid hailing company
Talked
ORG
to me a little bit about how you got to
Silicon Valley
LOC
.
Jeff Bezos
PERSON
or
Andy Jassie
PERSON
tell us about your upbringing. I was born in
Senegal West Africa
LOC
My parents, I thank them to
this day
DATE
. Sort of made school an implicit expectation. It was an up Discussion. Very early on. I showed an attitude and interest Not so much in biology and in building things and so they cultivated that and then I bounce back between
Paris
GPE
and and
Senegal
GPE
. Learned a lot about what technology does to people's lives. And what it makes possible. I literally had a contrast every Buttons and so computers were coming online. Not the internet but the what the internet was going to make possible was also coming online. The
US
GPE
was to the place to be. To study that then basically got jobs in the industry and eventually ended up at
Intel
ORG
in in
Portland
GPE
through that started into facing with silicon valley and then zooks came along. I heard a story about you hacking a phone in Talk to your friends long distance. Did that really happen? Oh yeah it did. I always had a double life a little bit in terms of family, friends in different ecosystems. I still do to this guy. And so back then it was landlines. I was And my dad isn't wasn't telecommunication so if he was not confused so we had a rotary phone I'm
Was landlines? I was And my dad isn't wasn't telecommunication so if he was not confused so we had a rotary phone I'm dating myself and he locked it but obviously I figured out how to still make the phone Who wear a role models back then I mean it's so hard for young people especially young girls to see themselves in the tech
Mary Curry
PERSON
Was and still is a role model. In
France
GPE
you study philosophy and a lot of the philosophers are also mathematicians So they were role model and they also forced you to think To Chief Strategy Officer at In And it was a difficult time for
Intel
ORG
.
Intel
ORG
was kind of losing. Way. What was it like working there at that time? It was a difficult time in the sense that anytime you're successful, you earn the opportunity to talk about what's the next phase of the journey and I was in the middle of that. But it was also fun. I learned a lot. What was it like going from an established brand name
Tech
ORG
company like
Intel
ORG
to a startup like
Zukes
PERSON
I assume there are major differences in culture and execution there. It was quite an awakening. So I didn't tell I was a little bit known as not a rebel but somebody who questioned things and who maybe did the normal. Oh my gosh. You know it was too slow or is this or that or the other? Agitator of sorts. A change agent I think is the elegant way of putting it and so alright when I arrived at zoo yes it was fast it was we were making decisions But from an infrastructure standpoint with I was like woah. There's reason for infrastructure and so but I embrace the journey and said okay we have to One. When you're doing what we're doing. It's not just about the technology. You have to think about the steps to getting to market. You also have to think about building the company. That it's ready when you scale if you wait until you need to scale to actually build the infrastructure bad things happen. What's it like being leading black female executive In such a white male It depends. I don't wake up in the morning thinking I'm that I wake up in the morning thinking I'm Aisha. I've got stuff to do. Meetings, decisions to make Kids to take care of For dinner is ready. Obviously, in the moment, sometimes I think about it because you look around but I I try and turn it air into an opportunity because and that's just how I I have one ones with myself and how you think about it and how you show up. It's important. So, I try and tell myself that means that I'm bringing a perspective that And that's additive And I try and also figure out a way to have what I call an inclusive environment where I see people's point of view and they see mine and I try not to get angry When it manifest itself in annoying ways. What are the obstacles that you've overcome To get here I think that often people assume both an agenda and sort of ethnicity standpoint that Not normal to be here and therefore maybe you got a discount when it's often the opposite. You have to try much harder than than others. I've had to work on
Sort
PERSON
of how I receive information when or how I I deal with behaviors that I'm not acceptable And sort of learn when you take the high roads. I've had to find my voice and not be afraid of it and use it. Are you pleased with the change you've seen or has it not changed fast enough? I can't be pleased. I mean, I I'm pleased that there is change but absolutely not. We have to do a lot more as an industry. Why isn't it changing faster? Why don't we see More people like you in positions of power. Well, I think that's a complicated answer. I think it starts very early on. I have a son who participates in
Lego Robotics
LOC
and we had some observations and kids are at
seven, eight
DATE
, and you already see difference I think also from a social standpoint, around middle school, when there's a transition, for girls, maybe having a support system to stay in math,
D.
NORP
From a social standpoint around middle school when there's a transition for girls maybe having a support system to stay in math destifying it teaching it differently and then as people come up the ranks making sure especially for women making sure that we have a System around them so they can traverse through some of the some of the phases like for example marriage and childbirth and so on. You're building a ride hailing service, not a car. Why is it important to have a woman in the room? People of different races in the room. I'll give you a story. We were discussing pick up and drop off. And I'm the only woman in the room. Yes, I'm always in jeans and what have you but occasionally, I dress up and have high heels on. We're wearing high heels
today
DATE
. Yup, I made a comment. Okay we have to think about it from that standpoint Because if we're giving right to customers in
San Francisco
GPE
for example on a
Friday
DATE
evening
TIME
on a
Saturday
DATE
evening
TIME
maybe some folks have heals on and maybe we need to think about the pick up rages Because expecting them to go uphills in you know high heels probably not a good idea Our Tesla and
Elon Musk competition Valley
PERSON
. We you know pay tribute to disruptors. A lot of the satellites have proposal systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines yeah we offer a collision avoidance survey it's a subscription service we'll send you an alert
up to 7 days
DATE
in advance if your satellite Come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've installed so much more hardware in the space. You have a big collision it creates a cloud of debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up We've got the information and Yes it's about renewables This is a level of uncertainty that we haven't had to deal with. Let's talk about the competition what is
Zuke
PERSON
's edge over
GM
ORG
's cruise googles way mo and if you could level with us what's their edge I look at them a little bit like fellow travelers. Competitors because we're in the same space and we're going after some of the same things but this is a big industry It's not gonna be a winner take off
second
ORDINAL
it's a safety Product and therefore, I think it's important to lay that groundwork. Now, having said that, I would say one of the big differences is that we are going straight to what we think is the ideal product to provide rights to customers. We are not here to enhance your driving experience. We don't even want you to think about driving. So the customer experience is built in such a way that you're here to be transported. You have an app which you already know how to do
today
DATE
. You have an app where you say I wanna go from point A to point B especially in dance urban environments. Think downtown
San Francisco
GPE
. And we'll pick you up. Sliding doors. You step in. A little bit
London
GPE
car but We don't ascribe to taking a car that was architected Designs for human driver and then adding sensors and computer to it in order to make it fully autonomous. What about Tesla which is write down the street Our Tesla in
Elama
GPE
.
And then adding sensors and computer to it in order to make it fully autonomous What about Tesla which is right down the street Our Tesla and
Elon Musk
PERSON
competition Fellow travelers. This is silicon
Valley
LOC
. We are you know pay tribute to disruptors. Having said that we're not exactly in the same business. We don't sell a car to people. We sell a ride to people. Our customers are not drivers. They are riders. And therefore we use the same types of technology. But they are in the car selling business. How does
Fit
PRODUCT
into the future of
Amazon
ORG
. Well, that story is yet to be written.
First
ORDINAL
of all, we we hope to deliver on the promise of a new segment. Sort of AA big business and be one of those in the tradition of of
Amazon
ORG
. We know there's a world of possibilities but I tell everybody we first have to earn it, right? Before we talk about sort of synergies and possibilities and opportunities together. Oh times anything is still oh and it will be for a long time. We're focusing on building our business, getting to market, and then there's a
10 1000
CARDINAL
of possibilities of things Could do together. Is
Zuke
PERSON
's gonna be dropping off my boxes Is that what I should expect? If that's the right thing to do and if it makes sense to do so but first we're gonna make sure to take you everywhere you need to go without having to worry about parking, having a car, and so on. What's it like having
Amazon
ORG
as your boss It's been good. We're on independent of of
Amazon
ORG
. So yes they are involved. We agree on what's gonna happen. Why it's gonna happen? How often did you talk to
Jeff Bezos
PERSON
or do you talk to
Andy Jassie
PERSON
or maybe it's
Dave Limp
PERSON
Don't talk to them that often. I mean we have
monthly
DATE
business review or quality business review but no it's not like I'm besties with them and we're on the phone and wrapping and chatting now. Well you must know what they're Execute get to market scale. And do you have the funding to do that? G Very well funded competitors or fellow travelers as you say. Are you getting what you need? What I need. I funding is not something I even worry about. So what's it like to operate in that environment? Where money is not an issue? Well, I mean, you have to be careful, right? Because you also don't want to be a drunken sailor and be like, oh, now I have, you still have to be very disciplined. You have to manage the phases of the business. Well, like, okay, how do we exec How do we make our milestones? How do we get to market? Where are things organized properly? How do we hire? How do we retain? And so on and so forth. How do we stay mission driven? The public seems to have lost interest in waiting around for self-driving cars. I rode in google self
2011
DATE
. Wow. And I'm still waiting Able to buy or just ride a self-driving car on demand. Why is it taking so long I think in self driving
first
ORDINAL
of all the opportunity is so clear The the beach is so broad. We forgot that big things do start small.
One, second
CARDINAL
, it's a hard problem to solve. We talk a lot about safety And we talked a lot about human error when it comes to driving. But we also forget that collectively at least in
the United States of America
GPE
. Collectively driver 100 1 million mi Before Having a fatality. That's a lot of miles. So humans are also pretty good. And the thing humans are good at. Which is hand I call it exception handling. We all know how to drive. If you are all fully autonomous, would be deployed already but we're driving amongst human and you have to deal with so many little scenarios. There are so many things that you've been learning about driving since birth. And codifying that using AI sensors and and computers is turning out to be a lot harder. Last but not least, it's a safety critical system. None of us. Deploy. Unless we have clothes loop evidence that were safe. So what is the AI I need to learn how to At this point what are the challenges left to solve it needs to know how to deal with unexpected things. I say as they happen. And is that possible? That it can I AI learn that? Of course it's possible. I mean I'm one of I'm an optimist when it comes to technology. I started in wireless so you have to think from Switchboards all the way.
Can I AI Lona? Of course it's possible. I mean I'm one of I'm an optimist when it comes to technology. I started in wireless so you have to think from Switchboards all the way to
today
DATE
. Quite a journey. I'm fascinated by flying. Airplanes. The right brothers if they were trying to solve what is being solved in aviation Day. They wouldn't have tried. We we just let let it marinate. Let it take its time. The algorithms will get better. Commute gets better all the time. Senses get better all the time. It will happen. What about security challenge We've reported on how
Tesla
ORG
's have been hack So you have to design security in your into your products from the beginning and for us we look at all the scenarios Of what could happen from the security standpoint. Now, these these robots or these robot taxes are also recording all the time. So, they sort of know what's happening inside of them and around them so that gives us a little bit of a of an edge and then you look at access This is something you just have to pay attention to understand what's going on in that world and make sure that you design What does
Aisha Evans
PERSON
see as the future of
Zuke
ORG
's do you see a global However you get your new Hey Facebook And we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need. How many rights have you taken? Actually, it's such fair, alright? I take a lot of riots. Both in our Lthree testing fleet. As well as in the ground up robot taxi. So, when you take a ride, what's your report like generally afterwards? Well, okay. So,
Two
CARDINAL
different things on the test fit because and this is a big difference between us and our fellow travelers. I mean our L
three
CARDINAL
fleets the
Toyota
ORG
Highlanders are now outfitted with the same center architecture placement and compute. There are purely engineering past vehicles. So when I it's called drive review. When I take a ride it With understanding what progress we're making, what issues were still having, I'm fascinated by the scenarios we can't handle. How fast was tele ops able to step in and so on and so forth. So then I have a Reports and the app and this and that. Robot taxi it's more like I'm excited. I'm usually giggly. And then after
5 minutes
TIME
I'm bored. And I'm on my device. Which is what you How is it navigating supply chain challenges A chip crisis impacted you? Yes, it has. It's impacted everybody. Look,
first
ORDINAL
of all, some things are just more expensive than they should be
Second
ORDINAL
but you accept that it's the same for everybody. You have to get a lot more crisp around your needs because lead times are longer. And that's really when it pays off to have had a good relationship with your suppliers and treated them as partners so you can talk about your problem statements and arrive the solutions but it hasn't like slowed us down. It's just been an extra vector Man.
And treated them as partners so you can talk about your problem statements and arrive the solutions but it hasn't like slowed us down. It's just been an extra vector
Manage
ORG
. Uber and Lyft seem like a would be obvious partner Could you talk to them We in this industry there are no secrets And we're all friends. We all talk to each other. At some level or another. So, yes, we all have talk to each other. Would you imagine would be your
first
ORDINAL
customers? Well,
first
ORDINAL
of all,
Las Vegas
GPE
, we've been public that that's our our
first
ORDINAL
lounge. I call it sort of affectionately a
one
CARDINAL
street dance urban environment. How's that? With a lot of demand. And then we really think that in starting at least at the beginning, Cities that have a very dance or urban sort of landscape where people are going to work, people are going to museums, people are going to restaurants, they don't wanna worry about parking, we think that would be the
first
ORDINAL
customer. So, commercialization is on the horizon in
Las Vegas
GPE
and also
San That
GPE
would be next. How do you stay motivated on that Commercialization. Given that there are still, as you say, these hard problems to solve. Cuz every day literally Either Something happens in terms of progress And it's really important to not just look at the ultimate success but I call it like kind of along the way. The little celebration. I mean, even when I do drive with you, yes, I have a long list or you know, oh what about this? What about But the vehicle will do something new or something awesome and you're like, oh my gosh, you go awesome. So, there are so many things that happen on a
daily
DATE
basis,
weekly
DATE
basis that you see advancement. I I talk it's Climbing, right? You get to a certain element or a certain place. You appreciate the journey. You turn around, you look down, you see what you've done, then you're like, alright, let's go for the next pic. So, as you put points on the board,
Aisha Evans
PERSON
see as the future of Do you see a global Or do you see something more modest I see I want and I hope to lay the foundation for a global mobility giant. We talked about human being need transportation It opens up access to
Mobility
PERSON
, it opens up access to knowledge. It opens up access to inclusion, Not to mention safety the environment and frankly humans were just too valuable to spend also
400 1 billion hours
QUANTITY
worldwide driving and we think that this is at the center of that puzzle So that is the goal
Alright
PRODUCT
. So, we're gonna do, this is a little rapid fire. Yes. So, now, so just quick answers. Stand for. Sort of species that is solar powered and self moving in the ocean.
Interesting
GPE
. Piece of advice for your 20s. Take a chill pill it'll be okay What about your 40s Enjoy the journey you've made it Are you under restaurant at some point is that I confused the love of cooking and running a restaurant What's your favorite thing to cook Champion which is a goodies dish. Biggest guilty pleasure. Trashy books. Box. Fellow travelers what's your favorite travel destination Hi. Which island.
Hawaii
GPE
. Last TV show you've been I'm in the middle of it at
Bridgeton
GPE
. What's your view on work life integ I don't use the word balance Work life choices setting expectations on all sides. They are everything. They are the beginning and the end. Our driver Is always right around the corner or
10 years
DATE
away give A lot of people ask me when can I tell my kids they can't have a they shouldn't get a driver's license and I think it's gonna be probably my kid's kids. Arguments for and against going public Against definitely focus Any pressure is something I understand and know and this is a long time
Scoring public. Against definitely focus The
quarterly
DATE
pressure is something I understand and know and this is a long term journey. So, focus is important. It seems to be everybody's dream in this valley. Is it yours No. No. My my my dream is to to get this this robot taxi out there and to see it deliver the promise that I know it well. Is
Duke
ORG
's gonna be on public roads
this year
DATE
? I don't know. We'll have to see What
about 10 years
DATE
? What is success look like for zooks in
10 years
DATE
? Several cities There I say hey I'm gonna zooks my way over there
Evans
PERSON
. Thank you so much for joining us. Great to have you. My pleasure. I appreciate you coming over. The world like
bloomberg
PERSON
. In
the coming months
DATE
do you see that coming
Taiwan
GPE
and
China
GPE
. Not just cop and wrong with unmatched reaching resources. The moment news breaks
24 hours
TIME
a day.
Ken Griffin
PERSON
is moving both Citadel and Citadel security is to
Miami
GPE
the scoop was broken by
Bloomberg
PERSON
's
Amanda Companies
ORG
now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to Software that is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? Sustainability, security, and hunger. In this episode of
Bloomberg Green
PERSON
, we're focusing on food and how we can reduce its carbon footprint and get it to the people who need it. We'll explore the near shoring of food production. Supply chain. We're locating our farms.
It's carbon footprint and get it to the people who need it. We'll explore the near shoring of food production. Supply chain. We are locating our farms close to the cities that we are actually serving. The consequences of a lack of food for the poorest in society. Right now, at this very moment, we do not have a food availability issue in the world. We are grappling with a food accessibility and a price-related issue. Diversify and we need to find alternative ways to to farming From
Bloomberg
PERSON
's world had quarters in
New York
GPE
I'm
Kaylee Lyons
PERSON
and this is
Bloomberg Green
PERSON
. According to
the United Nations
ORG
around the
10th
ORDINAL
of the world goes hungry that's about seven In
70 1 million
QUANTITY
people The number is frozen. Up about
six%
ORG
last year
DATE
. Is the worst hit continent with
more than 20%
PERCENT
of the population facing hunger. The coronavirus pandemic and the war in
Ukraine
GPE
are exacerbating the issues and putting at risk of goal to solve the problem by
the end of the decade
DATE
. Another key risk for Poor countries is extreme heat and what that does to crops and
last week's
DATE
episode we covered what extreme weather can do to the world and people and in
Episode
GPE
. We're going to focus on food. Farming and solutions to solve the lack of availability and the Impact of producing nutritious meals We're going to hear from
the United Nations
ORG
about some of the key To do with food and agriculture and then explore some solutions for producing food near where people live including vertical farming but Let's explore the impact of near shoring food production President
Joe Biden
PERSON
has signed a sweeping new tax in climate plan into law
the White House
ORG
describes it as a largest ever single investment to address climate change. Day offers further proof at
the Soul America's
ORG
Vibrant Future of America
ORG
is bright and the promise of
America
GPE
is real and just beginning. This law will mean investment in new companies joining the fight against global warming summit the forefront are those involved in near shoring food production But what does that actually mean Well, it's the opposite of globalization. Instead of taking advantage of cheaper labor and prices another countries nearshore in produces goods near where they are consumed. When it comes to dinner, food eaten in the
US
GPE
, travels
between 1525 100
DATE
mi from farm to plate is that a bad thing? Will it is if we care about food security or emissions?
The last 10 years
DATE
saw more emissions than ever
more than a third
CARDINAL
came from food production and food transportation is worse than we thought. A recent study found that it produces
up to seven and a half
DATE
times more greenhouse gases than previously estimated. Food miles are likely responsible for about
six%
NORP
of the world's emissions that's
three 1 billion tons
QUANTITY
of
COtwo
ORG
equivalent every year. Aren't equal. The
12
CARDINAL
. Five% of the world's population in richer countries account for
46%
PERCENT
of the emissions from food miles
Third
ORDINAL
of those emissions are generated by the international trade of fruit and vegetables the highest for any group. The emissions from transporting fruit and veggies nearly double what's produced in growing now. Sticking to your
five a day
DATE
maybe healthy for you but if it comes from
thousands of miles
QUANTITY
away the impact on the planet can be huge take a head of lettuce grown in
California
GPE
and shipped across the country to
washington
GPE
dc that uses up
about Six
CARDINAL
times as much energy for transportation as it actually provides to the person who eats it and the problem is only likely to get worse. Food production is helping to warm the planet and that warmer planet isn't turn affecting food production Scorching weather and drought are decimating farm mules from Waterloo to
Wichita
GPE
from Bangalore to Bordeaux. Food security also takes a hit as it becomes harder to produce and distribute spontaneously when supplies get disrupted and say have been by the war in
Ukraine
GPE
or lockdowns in
China
GPE
. And climb the disruptions.
This is never green. Is it possible the industries in an arms race that will Lead to spending itself into an over supply. I mean, that has happened before. We we we've looked at this very carefully and yo, the digitalization of everything. Tell me what aspect of your life Emily isn't becoming more digital. Well, I'm trying to prevent that but yeah. Hey COVID has accelerated that. The industry cost
500 1 billion dollars
MONEY
last year
DATE
. The semi conductor industry overall Estimator are
one 1 trillion dollars
MONEY
. A doubling by
the end of the decade
DATE
. At that point, I believe those estimates. It's not that there's not gonna be some blitz and turns on the way and the majority of that is driven by Process technology of which
only three
CARDINAL
companies can satisfy that needle. No one covers the world like
bloomberg
PERSON
. Seven% in
the coming months
DATE
. Do you see that coming? The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
. Welcome back to
Bloomberg Green
PERSON
I'm
Kaylee Lyne
PERSON
from
Bloomberg
ORG
's World headquarters in
New York
GPE
After an era of abundance fears abound that the world is entering into a fresh era of scarcity From climate change to pandemic disruptions to supply chains to war in
Ukraine
GPE
and declabilization have impacted Security globally In the world's developing countries. Now, let's bring in
Beth Beckel
PERSON
deputy director general of
the food and agriculture organization of
ORG
the United Nations
ORG
.
Beth
PERSON
, Are global food supply and where climate ranks in that? How great a threat is it? Yeah so you are are right on message and the fact that we are very much dealing
today
DATE
with a climate crisis that agriculture and food production is right at the center of and this comes as we all know Setting right on top of the COVID-19 pandemic. We also have the war in
Ukraine
GPE
which is disrupting markets creating other challenges for farmers all over the world in terms of supply availability of both commodities and fertilizers and other important inputs so when we think about the importance of needing to address climate driven challenges and thinking About the future of how agriculture can become more sustainable. This is the moment I think before us to really make sure we we commit to that. Well, as you say, this is a problem. All around the world but what regions specifically are at the greatest risk Yeah so when we really focus on climate I mean I think we have to be honest that really it's every part of the world that is seeing climate driven in packs we we see those in
the United States
GPE
we see them in
Europe
LOC
whether it's it's increased temperatures new floods that are emerging continue Rivers are drying up but when we look at the places on this planet where people are food insecure they're hungry they're being driven to really high rates of of starvation and and even malnutrition when we really think about those places and also have conflicts that have emerged On the global south
Latin America Central America
LOC
the dry corridor is we call it another parts of of
Asia
LOC
as well
Crisis
ORG
is here.
Latin America Central America
ORG
the dry corridors we call it another parts of of
Asia
LOC
as well. The climate crisis is here in every part of the world We need some kind of call to action if we're going to solve that problem or at least mitigate it, right? So, what Tangible that can be done to protect the global food supplier at least adapt the way we think about food the way we eat what we're eating in order to be able to deal with that changing climate Yeah, so this is where for agriculture especially, I think this is the moment where all of us need to do agriculture is part of the solution. As opposed to being a part of a problem. And this is where a real commitment to Agricultural production which means doing more feeding more people but doing it with fewer resources, fewer inputs, and with less of an impact on the planet. So, doing more with less and this is where I think in this very moment, the opportunity for science, for innovation, for
Productivity
ORG
changes to all of agriculture is most important. And finally Just talk about affordability because as we've seen born out in so many different sectors of the economy in
the last year
DATE
we understand that constraint supply leads to higher prices how much when we think about food shortages is just that actual shortage not having enough to feed people and how much of it is What is available is more expensive and therefore affordability becomes a problem and access is an Right now, at this very moment, we do not have a food availability issue in the world. We are grappling with a food accessibility and a price-related issue but hopefully, as we continue to see more movement and perhaps getting grain moved out of the black sea region We are seeing record prices start to ease a bit we are having good prop production forecast in a number of the important regions of the world and so the very I think important message for all of us is to really make sure that we keep markets open that we don't find ourselves in a position where countries are
Unnecessary
GPE
trade restrictions or other kinds of bands on on market openings. This will be another really important. I think aspect of navigating
these next several months
DATE
. Deputy director general of
the food and agriculture organization of
ORG
the
United Nations
ORG
thank you so much. And coming up we've seen the problem we've looked at the consequences so what solutions are out there we'll take a look at some innovative methods which are prime to change how we produce food and how far away we produce it that's up This is
Bloomberg Green
PERSON
In a
seven 1 trillion dollars
MONEY
industry there's a lot of ground to cover Every Friday with
30 minutes
TIME
dedicated to fix income I'm
Jonathan Farrow
PERSON
this is Welcome back to
Bloomberg Green
PERSON
. I'm Cade the Glines from
Bloomberg
PERSON
's World Headquarters in
New York
GPE
. Agriculture remains
one
CARDINAL
of the biggest challenges in the fight against climate change with food systems responsible for
as much as 30%
PERCENT
of global greenhouse gas emissions as well as contributing to a lots of biodiversity. At the same time, extreme weather events linked to rising temperatures undermine farming and seafood production creating a vicious cycle. What solution may be swapping breath for height and farming into the sky. Vertical farming methods may be able to deliver high Consumers with less waste and without concerns over fickle weather. We shoved like maybe I wanna What is very important about indoor farming is that this opportunity to really understand the possibilities that we have in
the years
DATE
to come. We'll give you a walk. Warehouse scale indoor farms. Completely independent of weather and seasonality What we're really doing is not just reinventing farming we're actually reinventing the entire supply chain we're locating our farms close to the cities that we are actually serving
Harvest
WORK_OF_ART
versus
weeks
DATE
or
months
DATE
of time nutritional agricultural system.
Jose Andres
PERSON
has been an investor and an adviser and a friend of
Valerie
PERSON
for quite some time. Situation inside
Korean
NORP
right now. To solve many of the problems that we face in the simple thing of losing foot. Hey bro completely pesticide free so there's no herbicide no fungicides no insecticides for over 100 times more productive than a square foot of traditional farmland and we use only a tiny fraction of water compared to traditional agriculture. What makes that all possible is a combination of robotics and automation that we design and develop on our own. As well as the battery operating system. It allows us to control the very micro level The conditions in the attributes around our crops and to adjust variables in real time and that kind of control allows you to drive flavors and attributes of props that we've never even experienced yet before. It
Valerie
PERSON
we focused on leafy greens and herbs as a start and we have the technology we have the retail partnership we have the know how to begin to move into new crops Incredible representation of what we can do empower it. It's a fruit that's extraordinarily seasonal.
One
CARDINAL
of the most pesticide ridden fruits. These are issues that we face. So we can focus on variety and flavor and texture We can strawberry is quiet there's some there's many is unbelievable It's a great strawberry Hey My restaurants totally. Bring in the right technology.
It's a great strawberry. Hey Facebook Of course being my restaurants suddenly. Being the right technology the smart technology to be able to
Foster
ORG
, quicker, better, smarter, and less use of water Will be even more calorie dance props. If
Valerie
PERSON
we've been growing
hundreds and hundreds
CARDINAL
of variety of crops we're thinking about agriculture for the generations to come give in the climate crisis that we're dealing with today More meganisms to produce for the More chances we have to solve many of the footage that we Not all of us have the luxury to go to a farmer's market. We can bring that high quality, local, fresh produce to consumers everywhere in all types of retailers as well. So, what you see here is very much the future in more ways than one. For more let's bring in
Erez Galonska
PERSON
the CEO of
one
CARDINAL
of
Europe
LOC
's largest vertical farming facilities in farm
Vertical
ORG
farming as a whole and what problem it is you're trying to solve.
First
ORDINAL
of all, we are in farm building a global farming network,
Bye AI
PERSON
to provide premium produce if you like in affordable prices our vision is to help cities become more self sufficient in their food production I can tell you In from we escort ourselves one of the biggest questions and trying to overcome one of the biggest challenge humanity faces how to feed clothes to
10 1 billion
MONEY
people by
2050
DATE
and we know that we have
three
CARDINAL
main
Threats
NORP
very big ones eh the world is facing
today
DATE
climate change epidemics and of course wars and dish shocks ehm represent major wake up call ehm to the fragility of our food systems and the need eh to make them more resilient and more reliable to feed people at scale and Exactly what we are doing within fun. So obviously there is a major challenge that you are trying to help address but that doesn't mean that you don't face challenges yourself what do you think the biggest Is facing vertical farming as it attempts to scale and meet the world's needs. I will echo again the biggest ones is execution With the climate change in the pandemic supply chain structure and logistical state going up inflation And Very big problems that eh they could they we know that these shocks install time and we are very much focusing on execution delivery of products to our consumers and to our clients and I can tell you that we already signed
hundreds of millions
CARDINAL
of contracts with leading retailers globally so it's About execution and delivery on time and it's extremely challenging during during this
Puberland
GPE
times. Well, clearly in farmers growing very quickly. What scale do you think you'll able be able to Eventually. We tend to have growing centers in
20
CARDINAL
countries with
millions
CARDINAL
of growing Square meter Active in the field growing the entire foot and vegetable basket I can say Pipe supply chain destruction and the ongoing war in
Ukraine
GPE
. We continue to execute. We just tell launch a new facilities in
2022
DATE
. Increasing our footprint by
20 1000 square meter
QUANTITY
which is
40%
PERCENT
up then half one of
last year
DATE
. And just widening the lens beyond in farm when we think about vertical farming as a What role do you see it playing eventually in the agricultural mix? Is this going to supplant traditional agriculture?
1 day
DATE
in the future. In order to mitigate risk and overcome those negative challenges we need to diversify and we need to find alternative ways to to farming and of course vertical farming control environment that we portraits one of those solution if you look on the total addressable market the food and vegetable market will be
And of course the birthday girl farming control environment that we qualrates one of those solution if you look on the total addressable market the food and vegetable market we are talking about
Three 1 trillion
QUANTITY
soon to become
six 1 trillion
QUANTITY
food and vegetable market and a vertical farming market share from this is going to be in around 30 1 billion by
2030
DATE
and I can say that this trend will continue as food and food security become even more important
Times
ORG
of crisis. The CEO of In Farm thank you so much. Okay so we've looked at how we might form better on land but how about our oceans sus Fish farmers say wearing salmon far away from their wild cousins solves the problem of waste parasites and disease so let's take a look at how sus Blue farms in a close loop ecosystem to minimize their environmental impact Any salmon that's produced online is better than a salmon that's producing an open net pen. The attitudes are changing per capita consumption is increasing of seafood and aquaculture needs to respond. My name is
Kirk Havercroft
PERSON
and I'm CEO for
Sustainable Blue
ORG
which is a land based salmon farm situated on
the Bay of Fundy
ORG
. Currently in
North America
LOC
we consume somewhere in the region of
half
CARDINAL
a
one 1 million metric tons
QUANTITY
of
Atlantic
LOC
salmon
every year
DATE
but
only about 140 1000 metric tons
CARDINAL
of that is actually produced in
North America
LOC
and the reason for that is that salmon farming in the ocean can only take Certain latitudes because salmon need a fixed ranging water temperature within which they can survive. There's what we call open the forms of aquaculture and this is where we see cages or pens that are suspended in the open ocean If there are any diseases or anything like that. There's no way of protecting your fish from that. And that's a critical piece of the problem that we're trying to solve. So
Rasfani
NORP
has a tremendous opportunity to fill that domestic production gap of the acronym rasp stands for recirculating aquaculture system the water circulates between the fish tank and the filtration system which keeps that water clean and returns it back To the fish and that keeps the fish healthy and protect the fish from whatever those threats might be out in the ocean In traditional
Rass Farms
ORG
as the fish are feeding and producing that waste. The waste is filtered out and then finally discharged back to the ocean. And that was a particular component that we wanted to resolve. Sustainable blue has developed its own filtration system which is not discharge any waste back to the ocean at all. The advantage that that gives us is we can detach fully from being located by the ocean and produce fish where the fish are consumed rather than producing fish where the farm has to be located We actually have both fresh water facilities and salt water facilities here. We have to do that because so that their biology needs fresh water at the start and salt water at the end. So we're not about to change that. We have to replicate what happens in the wild. Whilst I think what we all felt was a small business when we started over
the past 10 years
DATE
what we've seen is the almost infinite potential. That this kind of technology brings. It has given sustainable blue the position of being to the best of our knowledge at least the only oh discharge salt water aquaculture facility anywhere else in the world. So, from the problems of food scarcity, supply chains, and environmental concerns to solutions like vertical farming.
This week
DATE
Explored the impact of agriculture on society and the environment.
Vertical
ORG
farming. Would be impacted agriculture on society and the environment. Open up for this edition. Instagram and
Twitter
PRODUCT
. Climate. World headquarters in
New York
GPE
. And that is when we're green. We don't have enough women founder CEOs who are getting funding so basically less than two% of
VC
PERSON
funds go to women less than
one%
ORG
go to women of color and so in this
Innovation
GPE
space. I said to myself, what's the best way to use To move things for women and that's when I started to say, okay, I actually need to move some money into the venture capital space and I wanna do it smartly. I mean, the
first
ORDINAL
goal is to make money. I'm not putting my money out as a social impact. I'm putting it out to make money but I wanted to go behind funds like aspect ventures that's run by
Teresa Gow
LOC
and
Jennifer Ponstat
PERSON
, who are looking at these And they have a thesis around my gosh. There are so many opportunities there. If we go towards funding some of these women businesses. Some LPs have said to me, all we care about is returns. Some of the best investors may not be the best people but they have the Returns. What do you have to say to those people? I have to say you're investing in what you know and so you need to look at what trends are coming in the nation and how you're gonna address them. Women are
85%
PERCENT
of consumer dollars spent. Women control
70%
PERCENT
of financial In the house. So, if you're not investing in products that go towards females or women lead company, you're missing an opportunity cuz you just don't see it. Markets are preparing to close but the day is not over yet.
45%
PERCENT
of volatility right now. You need top analyst to bring you exclusive global insight into cross asset markets. Bitcoin ain't buying along
today
DATE
it's gonna be short term Hi I'm
Shanali Basic
PERSON
and you're watching the Nets Big Risk in
a year
DATE
that was marked by
Russia
GPE
's warn
Ukraine
GPE
soaring inflation around the world and torn supply chains market sea risks everywhere but
Three
CARDINAL
titans of finance are looking further out for the next risks. I think that the promise of the
American
NORP
dream has to be defined Hey almost know this voice about a future pandemic and almost no momenta The globalization you're gonna see Dates look internally and make sure that they have the ability To support themselves. With
Abby Joseph Cohen
PERSON
who's concerned that future generations in the
US
GPE
will not achieve the same financial stability as their parents unless public and private investment rises and
Americans
NORP
are protected by the right agencies to ensure economic growth and to defend the labor force. These are the next big risks. There are always issues and for me there are
three
CARDINAL
in particular that I'm focused on intermediate and longer term one has to do with our population for
more than a century
DATE
one of the pieces of the secret sauce for
the United States
GPE
growth has been the fact We've had strong population growth and strong gains in labor force and I'm concerned about that right now The
second
ORDINAL
area that I look at has to do with investment. For
more than 150 years
DATE
,
the United States
GPE
has been one of the global leaders in long term investment both government investment and infrastructure and also corporate investment in private capital. And what we're seeing is Will you fall in short over the last
Government investment in infrastructure and also corporate investment in private capital And what we're seeing is that we have fallen short over
the last decade
DATE
or
two
CARDINAL
and we need to be looking at that as well and the
third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government in the economy and let me be very careful in how I express this I believe in markets. I believe that capitalism has worked well in
the United States
GPE
but not unfettered capitalism. We have benefited from good regulation. Always the best but when we try to protect As a nation we tend to do much better we look at some areas in which that kind of solid appropriate regulation may now be coming under some risk and I think that would actually damage long term economic growth of
the United States
GPE
what about Of
the United States
GPE
is creating a more complicated future for labor in the country. Reasons the
US
GPE
economy has outperformed the economy of other develop nations for
the last 30 or 40 years
DATE
has been that we've had faster way before growth you know it's a very simple
Medic
PERSON
equation Workers, more GDP. Quite that simple but it boils down to that and in
the United States
GPE
, we have been very dependent on immigration. By the way, that's not new. This has been a nation of immigrants since it's founding. If we're not viewed as welcoming to talent from around the world, we'll have a problem going Long term growth. When we look at the information from individual companies and industries, we see that there is a labor shortage at all ends. We all know for example that right now, one of the reasons behind the rise in service inflation has to do with an inadequate number of workers At airports. In restaurants and so on The area that I spend a lot of my time looking at is the other end as well do we have enough new scientist do we have enough new engineers do we have enough new doctors and the answer is no we don't keep in mind you have to also create a pipeline Right? The students who are now K through
12
CARDINAL
are the future pipeline of scientist and engineers and doctors and we're not doing a very good job within In terms of their skills. Is this all kind of boil down to Erosion of the promise of the
American
NORP
dream. I think that the promise of the
American
NORP
dream has to be defined and that is Every generation doing better than the previous generation. Do they have the To do better than their parents did and what we have seen over
the last 30 years
DATE
or so maybe
40
DATE
is that median household income in
the United States
GPE
adjusted for inflation has not risen but that is a problem I think it creates a sense of political discord it creates a sense Unease among people in
the United States
GPE
and it is worrisome. Because we have to think about how do we get out of this? Well,
one
CARDINAL
way we get out of it To In on the industry that we think can create jobs that can create good paying jobs and and to protect our workers in that way the long term problem is staying ahead of the curve making sure that the industries that you're supporting
Eating
PERSON
jobs and those jobs are paying well enough so that individuals and households feel that they are moving forward. There about how investment in
American
NORP
infrastructure was one of the things that you were worried about. Is this the biggest area of investment that you are concerned about? Many economists, myself included, believe that the so-called golden era of the
1950
DATE
's,
1960
DATE
's, economy of
the United States
GPE
was linked to our willingness to Heavily in the future and it wasn't just
Golden era of the
1950
DATE
's,
1960
DATE
's, economy of
the United States
GPE
, was linked to our willingness to invest heavily in the future and it wasn't just the government, it was also corporations willing to do that. So as a percentage of GDP We were dramatically above every other nation. We were number one in that category for
century
DATE
. We no longer are part of that is because we are under performing our own previous commitment to this area but also other nations have figured it out. In
the 21st century
DATE
, the winning economies, the winning strategies for economic growth, and therefore Enhancing the well being of your people will depend upon whether you're investing. The reality is wages have not risen pace with inflation. And so if you think about the ability for the average
American
NORP
to earn a living. How does that kind of play into this longer term concern you have about
the next 10 years
DATE
not being as good as the last
10
CARDINAL
especially Companies are not going to be able to invest in the way that they used to under a higher interest rate regime. The the strength of economic growth Long-term prosperity. I'm not talking about stock market prosperity. I'm talking about the prosperity of the people in the nation is very much tied to the health of the middle class Obviously to weather the wage in the incoming increases for those families are adequate and that is something that has been a problem now for
40 years
DATE
in
the United States
GPE
where the median household income hasn't kept up So, this is not a new problem. I think what has happened is that this rising inflation has kind of pulled apart the curtains and now we see much more clearly where these problems are and where the issues are. I for one and happy to see that wages are now rising. I'm happy to see That workers have more flexibility and how they wanna conduct themselves and so on. I think that's that's a good start. It's not the end. Solution. We need to recognize that a
40 year
DATE
problem is not gonna be corrected. In
4 months
DATE
. It's Take longer. Don't Place.
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Find people. Analyze Marcus You can enter phrases Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Microsoft
ORG
Sacha
Nadela IBM's
ORG
Arvin Krishna
PERSON
my crime technology
Sanjay Majotra
PERSON
and that's just the start How did the chief executives of adobe deloy gap VM wear and that Count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top? Technology it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
. And it's a safe
Indians
NORP
make up
about three
CARDINAL
fourths of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
. And it's a safe bat that some of them will eventually find their way to the sea sweep. When you look over
the next 5 to 10 years
DATE
over a little bit of a longer time horizon and you think about what's happening in the economy and markets in society more largely
Keeps
PRODUCT
you up at
night
TIME
.
One
CARDINAL
thing that has, you know, I seen particularly important to me is how we handle future pandemic. I, you know, we we shared with COVID that we were not ready. For global pandemic and I think we are still not ready for the next one. The really worrying cases, is that we have a repeat of what happened with COVID, where we are not prepared at all beforehand, by ends up spreading too much of the world, but with a way higher fatality rate, and ends up A lot of people. The economy grinds to halt amid the chaos and lockdowns. You know, it's there for more extreme version of what we saw during COVID. Is part of your worry here that the next pandemic would be worse than what we saw in COVID and a worry that underpins that. The systems we have are not prepared for it. I think it was We have not started putting any of those processes in place that we should have had last time if you know we got a And there was a future pandemic that was substantially more fatal. You could imagine the same thing playing out but with a lot more devastation. Problem is that they're warrant that many lessons that it seems like we really learned as a society that we are in much the same place we were beforehand there's almost no discourse about a future pandemic and almost no momentum we don't seem to learn really the core lesson Which was that we were not prepared and that we need to be better prepared. Do you think this is going to put on an economic system in the future? I think that you played out pretty poorly this time when all of a sudden done and I think at the very least you could see a repeat of that where not only did we have massive supply kit problems that were now seeing in retrospect we had massive monetary supply increased trying mask over Some of the problems Would have been it probably a devastating economic hit otherwise as COVID winds down and are I economic I I monetary counter measures wind down it becomes clear we never really averted economic impact from It's had massive negative impact, right? You can look at runaway inflation, you can look at rising interest rates, a slumping economy, slumping markets, and and and that was without, you know, nearly just as they're put a bit of future one that that does much more damage and we might not be able to get back to what Obviously different Were impacted differently both within the
US
GPE
and across the world. So, do you worry about the compounding effect when it comes to, you know, the social strata Because of the global nature of pandemics If there is an outbreak in
one
CARDINAL
country that is going to affect every country And and and so not only juicy disproportionate dust in less while off countries but that also makes it really hard for the world to stop this spread of pandemics and that means that if there are countries
Trillions of dollars
MONEY
as a world. Trying to contend To fall out. From COVID that is a really huge expense and we're still locked down with it. It's a little bit sobering to see the scale of impact of that new combined with the game with just like Even solving the problem and that's with the workforce that is able to mostly go back to work in person if you have a more deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted for the activity
More deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted productivity declines that sort of talespin with the tens of trillions of dollars incinerated in the
first
ORDINAL
place The strain on political systems. You saw kind of the masking issue and the lockdowns becoming a really big contention point politically in many governments across the
US
GPE
and the world. How do you expect that to create a further strain on the system? Politically. I'm on And on many countries. You know a pandemic from getting out of control in the
first
ORDINAL
place. You know cut it off way closer to the source. That means instead of arguing about masks you know we should have been focusing on how can we get in place You know good ventilation in indoor buildings So that there is massively less spread of pandemics through them that would have been a much much healthier You know focus process as a society. Our ways that you personally are kind of incorporating this into your own work. I know you've been rising more and more both as a philanthropist and as a political donor, how are you thinking about this risk in terms of how you work ahead? This isn't a
one
CARDINAL
party against another party thing. I in the way that some debates over some specific
Techniques
ORG
ended up being I have been spending a fair bit of effort and and and time and in capital on trying to advance you know pandemic prevention I I you know legislation and in policy a lot of the discourse around you know COVID and pandemics in general has you know I I as you serve you know reference Focused on things like masks by the time that's the debate we've already failed at the much more important goal which is avoiding ending up there in the
first
ORDINAL
place by having countermeasures ready beforehand by having early detection systems by Good ventilation in buildings the goals to get to a place where outbreaks don't become pandemics and the
first
ORDINAL
place and where we don't have to shut down you know the economy where people don't have to die where we don't have to make trade offs and hopefully we can you know I think spend you know
tens of billions of dollars
MONEY
Today
DATE
to save
tens of trillions of dollars
MONEY
later on. There is a possibility I think this leads to revolution in populations that do not have control over there Food and energy. People ask me all the time what is the key to being a really good ambassador I tell them it's a surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade Transport that see at some point. Era of global commerce. Mission I'm from shipping. Sent me not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? So
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most? Front of us right now is is I think de globalization you're gonna see in a nation states look internally and make sure that they have.
Globalization you're gonna see Nation states look internally and make sure that they have the ability Support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglogalization phenomenon started before that? Well, I think it did start before it. All you have to do is look at
Brexit
PERSON
. I mean, the idea for
Brexit
PERSON
started, I think it's now
7 or 8 years ago
DATE
. It didn't Is let's just take an An exemplary Figuring this
Germany
GPE
So
Germany
GPE
strategy up to this point was to outsource their To
the United States
GPE
to outsource their financial management to the
EU
ORG
. They outsource their energy supply to
Russia
GPE
And they also they're in market to
China
GPE
. This was the complete globalization of an economy and you can see at this point, I think they're in extreme trouble. So, if you think that deglobalization is the next big risk, what's at stake from countries detaching themselves from each other? What really is the problem with For
a few decades
DATE
we were able to outsource to the cheapest labor markets we were able to rely on each other for goods that that really throughout history and I I do think part of this is going back and reading history most countries would not outsource items that were very important to their well being food being one And I think energy being one that's showing up is to be extremely important What's gonna happen now is I think each society is gonna have to think about did I did i outsource something that That I'm not comfortable with. How is this even possible to fully become the globalized when so many nations rely on others? It's not that every nation is rich with oil or rich with nickel. With food resources events. For those of us in
the United States
GPE
, we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position. Nuclear We're seeing Elements of deglobalization and it's cost To ordinary people. What are the costs? How else are you seeing a play out? Throughout history, food is always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supply supply supply chains harfied by the war and the invasion but I think the The motivations and the and the rational and what's happening behind it are gonna highlight to people can I provide the basics each country will move to protect their own citizens and as a result they might deglobilize ahead of you there are populations all over the world that we're not aware of but they wanna eat and they Be heated in
the winter
DATE
. Cheap electricity. And all these things are going through the roof and to the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food goods. I mean, we're talking about Part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
weed fields and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from From from having instruction we saw it again in
Sri Lanka
GPE
over
the weekend
DATE
you're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action To get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one
1 billion
CARDINAL
of them, let's say roughly or in
Western Europe
LOC
and the
US
GPE
. And we've set in course policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that
six 1 billion
QUANTITY
people
Two 1 billion
MONEY
it subsharing
Africa
LOC
During
Asia
LOC
are still trying to reach middle class We raise their
Six 1 billion
CARDINAL
people And it subsharing
Africa Asia
LOC
are still trying to reach middle class And if we raise their energy costs dramatically I don't think they're gonna be you know they're not gonna be happy about that and I I think the Arab
Spring
DATE
fundamentally started over food prices and their basic instinct in need is to feed heat cloth and take care of their family. So Are the forces that are reversing
decades
DATE
of globalization. Well, it might be just the safety of these supply chains and possibly the actions by
Russia
GPE
are a highlight to that but again, go back to
Brexit
PERSON
decision By the
UK
GPE
people In a vote to take back some of there also they had outsourced their labor force to
Europe
LOC
and they had started to make a decision to pull it back for whatever reasons they didn't like outsourcing again outsourcing your financial management To the
EU
ORG
and the
ECB
ORG
. You mentioned the outsourcing of financial assets. On
one
CARDINAL
hand I'm wondering what impact do the sanctions have. Some of our policy moves here are gonna have very long term ramifications in this environment. We've frozen the bank reserves of
Russian
NORP
bank And if you don't think that every single Maybe not every single but there's substantial number
Nance Ministers
PERSON
around the world have to rethink Where are there as a secure? I've had many people ask me What do I do if my assets in
China
GPE
What do I do in my assets in
Hong Kong
GPE
? There's a lot of there's a lot of western investment in
Hong Kong
GPE
residual. Happens if we end up in a similar disagreement or conflict are those assets subject to immediate abandonment? These are questions everybody's gonna ask whether they talk about them a lot or not. They're gonna be asked I'm not saying we'll go to
100%
PERCENT
investment in your own country but boy the risk
Premium
GPE
has significantly gone up. I mean, is this just a giant politicalization of assets around the world? As you see it, given that now, governments are getting involved in a much more Way in terms of the resources that they own oversee and trade. Companies. We've had to abandon assets immediately because of a political because of a conflict. So now you have to anticipate where in the world might we not like the activities of a future You can come up with a long list of where you might be uncomfortable and you have to truly change your your wrist profile there. So, we're in the middle of seeing a very effective use. The weaponization of resources now not everybody can weaponize the resources because they don't have They don't have enough resources. So, to the extent that this is the biggest risk you see on the horizon over the the medium to long term. What about it? Really keeps you up at
night
TIME
. There's a possibility I think this leads to revolution in populations that do not have control over there. Energy and in a world that we live in like it or not The the change in the world toward cheap energy
Asian
NORP
cars oil and gas is used for clothing. It's used for significant amount of products. And again, food is food and I get concerned as to what can happen in these these If if oil and gas does get to be $
200
MONEY
a barrel And if The supply, the actual food supply gets disintermediated. I think you could have ramifications. We haven't, we haven't seen. Now, I'm not I'm I'm pretty bullish on the world so I think people figure these things out but I I think the quicker The world focuses on it and and admits that they have to supply and be independent of global trade in its best way they can the better for their populations.
David Weston
PERSON
. From businesses most influential and instrumental. This is a level of.
Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio. No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
. Will not just cut and run.
Before hours
TIME
a day. Merge. Crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs cure. For something Universally important to human life asleep mystery surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understanding It's easy to memorize things that makes you smart. It can spit back a lot of back. But if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what your brain figures out while you're sleeping. Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks for having me. Just found out we actually lived in the same dorm in college.
Just a few years
DATE
apart So it's been almost a year since you took over From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to
Unionizing Amazon
ORG
Warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. I wanna start with a quick report card. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO Later he passed the rains to andy jassy his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profit
Amazon
ORG
web services Has stayed on its executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. Does the company manage market turmoil rising inflation and regulatory scrutiny and a push by some warehouse workers to unionize all while keeping customers coming back
Me
PERSON
on this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade
Review
ORG
of
Amazon
ORG
's performance And we've got time later to to really dig in but quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
Customers. Myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've Are good. You know, and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
, you know, so much of the
PPE
ORG
and food and essential items and people equipping their home offices were bought from
Amazon
ORG
and and you know, to scale the way we needed to. Remember, in
2000
DATE
Hey Facebook
People equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39%
PERCENT
your
over year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unprecedented Happen before but it was really hard to do that and we had to take the really big footprint of fulfillment center footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and double it in
24 months
DATE
. We built out that transportation network in
just a couple years
DATE
. In
a week
DATE
, nearly double the size of our workforce during that time and I think you saw it in other This is, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and so many companies and organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them That transformation. So, what about investors? I mean, the stock is down significantly from a peak
last year
DATE
. Broader market turmoil. I think, you know, for investors or financially, I'd say it's mixed. You know, I think we have some businesses are growing really strongly. If you look at
AWS
ORG
, you know, in in
2021
DATE
through
37%
PERCENT
, you're over year, you know, it's not a
74 1 billion dollars
MONEY
revenue run Business. It's pretty unusual growth and we grew
58%
PERCENT
every year
DATE
in our advertising business. You know, it's a
Two 1 billion dollars
MONEY
revenue run rate business. So, some businesses growing really strongly and you know, we've continued to grow at our retail business despite pretty crazy, comparables during
2020
DATE
but I think the real challenge for us there is on the cause side and there have been several That have happened. Some of which are more controllable than others. You know, I think the part that's less control was really around inflation and I think we thought that inflation would start to attenuate in
20
CARDINAL
To and with the war in
Ukraine
GPE
it just went the other way and has significantly accelerated so the cost of trucking and line horn ocean and air and fuels to substantially gone up and I think that will tenuated some point no one knows how long that'll take I think the more controllable areas for us are really around fulfillment Capacity and productivity. It was taken
about 24 months
DATE
to build new filming centers during the pandemic and so we had to make decisions, you know, a mid
2020
DATE
, an early 2021 on how much demand we're gonna plan for. And so, you know, we we end up with more work capacity than we need right now and and there's a Things that we're working on. We we've stopped building on properties where we don't need it yet and we've let a number of leases lapse and not a small number, you know, both those things. We've had a lot of occasions in our Where we work on productivity, made improvements, and with a lot of clearly to find issues and I'm confident we're gonna get back to the right level profitability. You are gonna sublease
30 1 million square feet
QUANTITY
of space. Is there a mistake in the Because of the overbuilding Have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your reura on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we made the decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, their husbands, some
Profile
ORG
. Yeah. I think that And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion. But I still think there are Areas that we can keep improving. You know, and I think
Yo
PERSON
the first one I I mentioned is safety you know I I think that you know in order for fulfillment centers that is the top priority and you know when you get into the details the numbers and outside of all the spin of it all you know we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about and I think we have a lot of work we can do to make our employees everyday lives easier. We have we've notified kind of a top
100
CARDINAL
list of Areas that we can be better at that we are just metronomically stepping through and so we made a lot of progress but we have a lot of work to do still.
Kind of a top
100
CARDINAL
list of of areas that we can be better at that we're just metronomically stepping through and so we made a lot of progress but we have a lot of work to do still. Ela must just came out saying he has a super bad feeling about the economy Tesla laying off
10%
PERCENT
of his staff
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed it's forecast for global growth. How do you feel about the economic climate? I wasn't planning on giving any guidance Please. But super bad or super super bad I I think there's some things released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you believe that that equation's gonna flip at some point, which we do. I think it will flip over a long period of time. If you look at different downturns, you know, should we have one at some point? We've been through a few, obviously, in
the 25 years
DATE
At
Amazon
ORG
. Customers changed their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you know, Probably
3 to 5 years
DATE
long and we're gonna continue to invent. We're Continue to be insurgent and we have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employees who are
Paid
ORG
in stock. You know, look, I've haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public. I have never tried to predict what the stocks gonna do and anytime I've tried to a little bit, I've been wrong. So, you know, I think it's it's pretty hard to Pretty hard predict what's gonna be in any short period of time. I do really believe that
Benjamin Maximum
PERSON
bed. In the short term, the stock market tends to be a voting machine in the long term intense to be a waiting machine. I think if you, you know, we've been through a lot of points in
25 years
DATE
at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down but you can't really control that. You know, we have a concept. We talk about a lot of
Amazon
ORG
. You know in the ultimate output for a company is share price you know and then other big outputs are free cash flow or profit or whatever you can't Manage the outputs. You have to manage it. The input level and that's where we spend all our time and so if you do the right things for the business long term, things tend to work out. I think we've had very good returns for investors
Expected
ORG
to be true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how? Has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. A lot of the satellites have propulsion systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offer to help these companies know how to maneuver their machines Yeah we offer a collision avoiding the survey it's a subscription service we'll send you an alert
up to 7 days
DATE
in advance if your satellite's gonna come dangerously close to a piece of debris or another satellite companies have been doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now the risk of Just because we've installed so much more hardware in the space. Are you have a big collision that creates a cloud of debris and now all the other satellites are flying through this whizzing map.
Installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this whizzing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up What are the moon shots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is
Astro
PERSON
the home roll better is it something else Well you know we have a unique way that we look at Big new investments and I'm not sure it's right or wrong. It just happens to be our way. And we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask If it's successful it can be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have confidence there if not can we acquire quickly if we like the answer to those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation and investments that seem pretty obvious like you know when I got to that company was Only retailer and then we expanded to music and video electronics and the obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the time but just
Imagine
ORG
what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments from making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Well, I know we're very bullish on it and remember we all the all the miles are a little bit different but for prime video, we have
200 1 million
MONEY
plus prime subscribers who are, you know, get that entertainment for free by Of prime and and so we have a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show
Richard
PERSON
earlier in the year
DATE
was a huge hit we you know we had Nasals season we we just launched the boys season which is are you a big boys fan I am a is Amazon Vott it's very good of course we've go to the rings coming up you know in On
Thursday
DATE
at football. So, I'm very
bush
PERSON
about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the acids there will go very well with the rest of what we're doing entertainment wise. So, if you look at
Warner Brothers Discovery
ORG
in Paramount Stars and Global. They're building really Significant subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant grocery business which is, you know, early stages for I I'm excited about
Kyper
FAC
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about Different the world is. When you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You're building the world's best personal assistant. We have, you know,
200 1 million
QUANTITY
endpoints already that are using
Alexa
ORG
. We're clearly onto something
Aaron
PERSON
. And then you are our Thomas driving right healing
Zukes
PERSON
that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a chance Be really significant. Now, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different company. Just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about them. We didn't mention Astro Hey Hey Facebook
I think they're very worthwhile investments and beds and I'm opti You didn't mention
Astro
GPE
obviously though powered by
Alexa
ORG
but I mean our home robots gonna be feeling right It's not really widely available for sale what's I hope you get one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role
these days
DATE
. What kind of executive chair he really is? He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside it looks like he's really focus
Philanthropy
ORG
. He's focusing on space. What kind Executive chairman is he What you know
Jeff
PERSON
has always gonna be involved and he has you know I feel very lucky to have been in
Amazon
ORG
for
25 years
DATE
. I feel very lucky to have worked directly for
Jeff
PERSON
for
20
CARDINAL
of them. And we have AA really close relationship and have for a long I mean I think we share a lot of the same values about customers and how important is the optimize for customers and how high standards they need to be you know given how easy it is for people to switch The importance of invention and speed and so you know I just feel very lucky to have had the chance to work so closely with him. So, is your relationship? I mean, he was your only For
25 years
DATE
, right? Is it relationship Mentally different than it was when you were the head of Every single job you have, the relationship is different. You know, remember might
the first couple years
DATE
I work for
Jeff
PERSON
, I worked is what we call the shadow then, what's really like achieve the staff and That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and it's different when I'm in the CEO role but you know the cost and has always been that we have a great relationship and Collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer. In the world
second
ORDINAL
only right now
Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse. I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired pulled off this union vote what's your message to Like him. Your message to the folks who think maybe we should join a union. You know, I think that in the first thing to be clear about is that employees get to make that choice whether they wanna have a junior or not. They always have had that choice and it continues to be their choice
Yo
PERSON
we happen to think they're better off without a union for a number of reasons including the fact that you know it's it's much harder when you have a union to have a direct relationship with your manager And to get things done quickly. So, if you see something on the line that you think could be better for your your team or you or your or customers, you can't just go to your manager and say, let's change it. So, you know, there's a whole process Bureaucracy that you have to go through to be able to do that. You know, and and we get, you know, when there's a union, we're gonna get the feedback filtered by what the union decides is worth bring up we'd much rather hear from every employee. On their mind and so, you know, I think if you wanna continue to have the structure that we've had for all this time, you have to have really competitive benefits and then, I think if you look at
Amazon
ORG
's, Unusual on this space we champion the $
15
MONEY
minimum wage
several years ago
DATE
Starting salaries now over $
18
MONEY
an hour which you know is is more than double the federal minimum wage. You get full health insurance and
401
CARDINAL
K and
20 weeks
DATE
up to
20 weeks
DATE
of parental leave and if you wanna get a college education, you haven't had
one
CARDINAL
Your choice program that let's our performance center associates be able to do so. That is a very unusual and compelling set of benefits and those were all accomplished without a union. So, you know, I think that we realize that we, you know, we have to continue to work on the relationship with our our employees and we need
Continue
GPE
to provide the the right benefits and you know we need to continue to work on safety and and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make Dill.
The mark that you want to make Dill. Access the financial world on demand Hear from leading economists Policy makers And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring just see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Why did the biggest names in business choose
Bloomberg
PERSON
? That is a great question. Great question. Great question. I'm glad you asked that. What is the key to being a really good investor? I tell them it's the surround yourself with and work with the best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest ambassadors in the world. The people that I would like to have managing my money. At Revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. The
FTC
ORG
has revamped its anti trust inquiry into
Amazon
ORG
and by some account Is Accelerating it. Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? If you are a large company, it's growing as to a significant extent like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody look That we will stand up to that scrutiny and I you know I think that's what we've tried doing running the business. We can't control what, you know, you know, whether organizations bring different suits against us but I think if you look at our business, if Look at the if you take out of you know take out of the equation that they're they're may not be the most objective you know leadership when it comes to
Amazon
ORG
and that organization if you look at the facts you know in our retail business we're about
one%
ORG
of the worldwide retail market segment share And remember
85%
PERCENT
of it is still offline And if you look in our
AWS
ORG
business
Yo
ORG
about depending on how you measure it
95%
PERCENT
of the worldwide global IT
Spanish
NORP
on premises you know and then we have a cloud business and then we have a portion of that you know we were leading market segment share in the Part of this but we operate you know we compete with
NWS
ORG
is really on premises IT in addition to the clouds so you know these are relatively small percentages of of Reply and you can kinda step through all the businesses and I think simply because you've been successful in a few different businesses, doesn't somehow mean that you have a natural market power. It just means you've been successful in a couple different We're experiences but we still have a relatively small amount of market segment sharing in those areas. What about the
SEC
ORG
? You're being sued by them over
third
ORDINAL
party data and how you used it. Do you think in the past
Amazon
ORG
made mistakes with letting Employees internally see How those
third
ORDINAL
party sellers were doing? Pretty good control. I mean, you know, we've course disagree with the premise of that but I would say that we have very good controls with respect to the data that the different employees that's were able to see and by the way, I think that we can be better for sellers. You know, I I think that Yeah we can have better tools from the get started we give better tools from the manage what they're doing across their their different
Units
ORG
. I think we can communicate better. There's a whole bunch of things we can do better. And we agonize over every single email or communication we get from sellers. We do very regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with On and I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes
Sellers
ORG
don't really long for e-commerce software.
Business by virtue of selling on
Amazon
ORG
versus not a completely changes what's possible sellers Don't really long for e-commerce software that exists in lots of places And it is not very expensive what they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects can be in terms of This is their building. So, we have a lot of work to do there like we're doing a lot of other places back. I think we were very strong partnership with sellers. What's the view of the supply chain On how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, significant issue All sorts of businesses. We have work really hard to open a lot more. Points of presence and ports in the in the increase our capacity in getting products in but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make Still on
Amazon
ORG
. I mean, in this new role What's gonna define the
Andy Jassie
PERSON
era Well, I I don't I don't really think of it that way. Emily, I mean, I I don't think it's really about any jazzy era or anyone person. You know, and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on AWS That is an unbelievable team not just an incredible leadership team which it is but just top to bottom and then the number of inventors and people care about customers
Operate
NORP
, you know, something where it has to work almost like a downtown. It's it's always teams and so, I look at every single one of our businesses And you know take our retail business or our consumer business which is the oldest for businesses Five% of it still lives offline. Oh my god. I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
, you know, the time I've been there, I think it Small compared to
the next 25 years
DATE
. There is a lot for us to invent. On behalf of customers and so you know, I'm excited to be part of the team that makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we have a responsibility to do that and so you know it's it's it's a long journey that we're working on but I'm excited to be part of it and you know For a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you.
David Weston
PERSON
. We think that's the next secular shift. Renewables. Level of uncertainty that we need haven't had to deal with.
Certain game that we haven't had to deal with. Television and radio. Communicating for staying in touch. Companies now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is It because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. For the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
EVENT
? Inflation is a terrible thing. Inflation you could tower.
Rainfall
GPE
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm
Eric Shatzker
PERSON
and welcome to
Bloomberg's Front Row
ORG
.
Today
DATE
, I'm talking to
Jean Hines
PERSON
, the CEO of
Wellington Management
ORG
. Based
Wellington
GPE
is one of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments but because it's a private partnership the firm has been shrouded in mystery.
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. She says sustainability will transform the structure of financial markets. We don't think it's woke we think it's part of like a very very important part of studying the That in the risk set of of
5000
CARDINAL
companies. Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. Do you believe that? I believe that.
Jean
PERSON
and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Virtues and challenges of active management what to expect from
Wellington
GPE
's expansion into alternatives the value of staying private here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
. The world's largest investment firms. But To
Black Rock
GPE
,
Sidelity Vanguard
GPE
. I could name others of course. Hardly known. And certainly not well understood Why? For a long history, we have had a very low public profile so that that would be number one. I would say another reason is that we are a subvisor. So, our largest business one of our largest businesses to be a sub To other companies that are well known household names such as
Vanguard
ORG
and
Fidelity
ORG
and T Row Price for example. So, we would we don't we don't market directly to consumers. We are the content provider. So, you combine those
two
CARDINAL
that we're not, we're not actually, we're not a household name, brand name, but it also at the same time, we had a very low
Profile
ORG
. Probably the reason most people don't know us. Is Public profile flying under the radar if you like being a little mysterious good for business a competitive advantage. It probably served us well.
Is Public profile flying under the radar if you like being a little mysterious good for business a competitive advantage it Served us well over time. I think for our current, if you, if you look in
2022
DATE
, why am I talking to you
today
DATE
? That our brand is known for our content. I think Very importantly and maybe even more importantly I also think it helps with talents So, it's very interesting that, you know, for
years
DATE
and
years
DATE
and years, we would be, we would try to have track talent and no one would ever know anything about And that sort of that was fine when we were a
Boston
GPE
-based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. The importance of having a Most of the asset management industry has made a bet. Yeah. On sustainability. Yeah. But suddenly ESG is is under attack Right there are state governments. Here in the
US
GPE
that are waging war on sustainable finance. They they're calling it wokehism. What do you think of that? We're not investing on the same ability from a value-based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earning? It's gonna how what are the risks to the News from ESG factors what are the opportunities for companies from an ESG factor so we don't think it's woke we think it's part of like a very very important part of studying the opportunity set in the risk set of of
5000
CARDINAL
companies is that to say there's alpha and ESG or
alph Sustainability
PERSON
. Absolutely. The alpha I'll be in the nuance of company research You know, what, you know, which company is in Science tools industry for example are going to create products to help biologic manufacturing be less admitting you're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year If you will of like building a momentum model and back testing it. What the factors were in
the last decade
DATE
? Almost every CEO. In almost every industry. Grew up believing that globalization was good. And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for. Yeah.
15 years
DATE
. Yeah. Is that Case. At the end of my tenure at
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Europe
LOC
and
Asia
LOC
it could be closer to
40%
PERCENT
of our employees so we are And intentionally continuing into invested in our offices around the globe but you're right the de globilization is we're in a period of regime change and declabilization I don't think that necessarily Our business to the extent that there is great investment talent all over the globe. Really great investment talent. We're we're we don't have a monopoly. We used to think we had a monopoly of investment talent in
Boston
GPE
and that clearly wasn't the case. You know, the reason we began to globalize our investment platform is is that the world was expanding the number Companies that were in
Europe
LOC
and
Asian
NORP
who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are is a global firm. This is a global economy and even if if there are certain trends that are de globalizing. There is still a world there for us to either think about Company perspective or think about from a from a economic from an economic perspective.
China
GPE
has become And is still becoming an increasingly complex place in which to do business. How do you manage that? So we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and and in
China
GPE
We're saying hi office. We are expanding our license to be able to invest in in the onshore
China
GPE
. Right now, it's small. But with an important place for us to do research. Are you already starting to do anything differently because clients are Concerned about inflation but
An important place for us to do research are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession Long lived it may be. Oh I think our clients have not made major changes. There's definitely more interest in our our commodities capabilities. Our inflation capabilities, our value, investing capabilities, which have been out of favor and and unfortunately for for us, we continue doing Those teams. Are probably on the margin more interest than they have had in the past Tag on the product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun dart
PERSON
patchai
Microsoft
ORG
suction adelaide
IBM
ORG
's
Arvin Krishna
PERSON
my crime technology
Sanjay Mayhotra
PERSON
and that's And that doesn't count
Indians
NORP
running companies all over the world. Incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make up Reforce of the immigrants receiving coveted Hone B visas for the
US
GPE
. And it's a
Wellington
GPE
is an active manager
Fixing
PERSON
? No. No passives? No. How come? That's not our core skill set going back to what is our core skills that our core skill set is being a research based And having these teams of of portfolio managers with different skill sets that practice their philosophy and process. There were research-based content company, generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying that the implicit promise to investors in actively managed Is that they'll either get alpha I'd beat the market. Yeah. Or better risk adjustive returns. Yeah I I think for us that it would I think Clients are asking for both of us, right? Hey portal go alpha Alpha and risk adjusted returns and that's Post a full financial crisis. Risk the pathway returns has become more important. But you go back to the basics. If you can generate
100
CARDINAL
basis points of
Far
ORG
a
200
CARDINAL
basis points of alpha over indecease that is a tremendous compounding effects. The reality, however, is that across the asset management industry, the active. Yeah. Investment management industry. Is oh or sometimes negative after fees and the returns aren't any better on a risk adjusted basis so If that remains the case what is the future for active management We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment. We already have this and I I do mean this. We have an incredible investment ecosystem. We don't have a CIO. We have an
600
CARDINAL
person investment ecosystem that that collaborates, that shares
Different
ORG
opinions on the same subject are welcome and thrive. If we can continue to do that and that's that that's the input. Like can we do that? Then hopefully our output over time. Will generate those returns. Private assets and alternatives. Yeah. Are still a small piece. Yeah. Of
Wellington
GPE
's $
One
MONEY
.
20 billion
CARDINAL
.
Put over time. We'll generate those returns. Private assets and alternatives are still a small piece. Yeah. Of
Wellington
GPE
's $
one
MONEY
.
20 billion
CARDINAL
in NAUM. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases, excellent at what they do. Into the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on. It's
fourth
ORDINAL
fund. So, we. That was the the growth equity initiative. Yeah, so we have
four
CARDINAL
by
the end of this year
DATE
, we're gonna have
four
CARDINAL
platforms Growth equity Biotech climb a technology and investing in diverse founders. So, where else can we go? So, that's the question. Like, where else are Yeah the world can we go we We don't have to be it's not about being number
one
CARDINAL
or number
two
CARDINAL
it's about growing that part of the business and and generating great results for clients that help that help the overall business the same is true on On real estate. So, we have a very strong structured debt Capabilities as well as real estate equity capabilities. So, can we attract talent to help us all go compliment those on the public side? You know, longer term, we we have we have we have One hybrid fund. You know, you could envision us having hybrid funds by sector that could that's like a natural extensions. We have such strong sector teams. So, those assets are what right now. All together. By
the end of the year
DATE
, they should be
seven
CARDINAL
or eight 1 billion. So, it's a small part. But still an important part of the That that's that's privates and alternatives. Privates and alternatives are
seven to eight
CARDINAL
. The liquid alternatives. We've been in that we've been in the long short business since
1994
DATE
and that that business is
approximately 30 1 billion
MONEY
. Okay. So put them together in your getting 40. People. In your position who started out As administrative assistants. Yeah. And
Rose
PERSON
to become CEO at the same company. Really, the only place you've ever worked. Yes. Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I, my parents were
Irish
NORP
immigrants. My mother raised
six
CARDINAL
kids and my father was a brick layer. So, I didn't know anything Stock mark. We didn't talk about stocks. At my house but I I would say they were very focused on education and so I Practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. In in as one of those one of the classes I took which was in my junior year it was sociology. It was a sociology class That you had to get a job. I recalled the class you have to take. This was the class you had to take but I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were high higher in college graduates as administrators So that's the story. Start to manage money. Yeah. Did you realize that this firm was interested in cultivating you as a leader? So, I started managing money in
1997
DATE
and so and every year from then, I began to manage more money in
1999
DATE
. I I was able to run a biotech Folio. Portfolio management skills. Hey I began my leadership journey Right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large family, a big
Irish
NORP
family. I had my my my life was planned out. I had social events all the time. Barbecues here. So I actually do think moving to
London
GPE
. Being alone with my small family unit.
I had my my my life was planned out. I had social events all the time.
Barbecue
ORG
's here. So I actually do think moving to
London
GPE
. Being alone with my small family unit. Being away from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership And then i became managing partner in
2014
DATE
. The world's largest health care fund. Yes How's that possible? With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. While also being the CEO. Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? So everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is your superpower. Superpower is organization. If I wasn't as organized and and sort of superpower and processes, I think it would be, it would probably be impossible. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. Of all the worlds this huge Thing. Output of
Germany
GPE
since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? We've talked About The virtues of being a private partnership Have you ever wondered to yourself of
Wellington
GPE
would be better off Public company? No. Why not? I've I follow public companies my whole career and from a lot of public companies you have to really focus On And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continue to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go public? It would probably be some drama Change in the industry where we need to capital in a way we don't need
today
DATE
. This company makes Alpha for our clients it is a profitable business I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public betrayed companies. Yeah. With
Assist
ORG
under management in the neighborhood of
Wellingtons
ORG
. Only handful. But they make You know those with a
one
CARDINAL
handle on the
trillions
CARDINAL
Make somewhere between one and
three 1 billion dollars
MONEY
a year. In net income Is that ballpark for
Wellington
GPE
too? Get me there. It's a nice try. Say is that we are we participate in the asset management industry We have a A similar More.
Also say is that we are we participate in the asset management industry We have a You know a similar We don't have the we are we are an investment management business so we earn a fee Damaging the money. We're not we're not heavily distribution oriented business All of our compensation though is geared towards performance So everyone at
Wellington
GPE
will do better if we perform for clients and that's the How do you decide who gets paid what? So that's that's the other part of our partnership. The
three
CARDINAL
managing partners which I've been won since
2014
DATE
. Distribute or determine the profit how the profits are split at the firm. So you have to imagine that has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust Who's having impact that we're not gonna play favorites that we're gonna be really fair. Ability to become a partner at
Wellington
GPE
A really critical part of our ability to attract talent. Talent has always been.
One
CARDINAL
of the hardest. Maybe be hardest problem to solve for in the investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created for diversity. How hard is the talent problem now? I think the pandemic has shown us and it probably should show most companies that it's not about buildings. It's about the culture. It's
Shared
NORP
values. In the future, we're gonna be more flexible about where our talent sits. How much of
Wellington
GPE
's success in the future depends on how well you integrate technology? I think
5 years
DATE
from now, we won't have a technology department. We'll have technology will be integrated into Business and I'll give you some examples. We have portfolio construction tools. We have ways to screen Portfolio manager has a philosophy and process and they have AA tool that helps them scream based on that philosophy and process We have these tools now that are bring very qualitative things into a quantitative framework. We have our own internal risk portal. So we how do you continue to make that a greater and greater we already talked about ESG and how much it's data oriented how do you make that more and more part of the portfolio construction process Which I do believe we are in a more complex investing world where it's not just about revenues and earnings and
PE
ORG
it's about a This mosaic of things are gonna impact the value of a company or the value of that return like what's the path of portfolio returns Is going to play a bigger and bigger part of that. There are A lot of acid managers Who do you think of us
Wellington
GPE
's main competition Well I will say I've talked to quite a number of them in my new role as CEO and I have a lot of respect for my peers Observation would be that they're all a little bit different, right? They're all a little bit different. But if you look, if you look at overtime, who has sort of a research process that's similar to us? Like I would say capital group, T-roe price, I'm often in meetings with capital and T Row Price, you know,
Pimpco
PERSON
on the fixing comes side is probably a competit Many many small firms and on the long short side. Name
three
CARDINAL
things you would admire. Firms and wish
Wellington
GPE
could do as well. Alright. Well, this is okay, give me
a minute
TIME
to think about this. I think that if you look at
Black Rock
LOC
, they have, they use their As an advantage To interact with clients. I don't think anyone really in that in that way can compete with them. In terms of the competition with a lot and I think that that is the just very impressive. Capital group and they're in their There are they're distribution in the
US
GPE
for example. Let they have a real, they have a very strong relationship with broker dealers in the
US
GPE
. That's also very impressive. If you look at some.
For example. In the
US
GPE
. That's also very impressive. If you look at some private firms, this is not so much direct competitors but firms that have been around for
20 years
DATE
. I think it's a real advantage if you've been on the private side. If you just have, if you've been around for quite a long period of time. So, obviously, firms like
Sequoia
ORG
, where they're not doing exactly what we're doing But they just have sort of this I'm studying them quite a bit just because we are How do we get how do we be excellent in the private business and there's a few of them that have just done such a good job Over time. That's been very impressive. Is growing this business important to you and to your fellow partners?
1000
CARDINAL
companies Always analyzing how our company's relative to their relative to their competition and their peers. So, we wanna do we wanna win, right? So, we wanna do well. I'm also a strong believer in you can't aspire to grow just for growth sake you we have to be super focused on the inputs and if you do really well on the inputs you will grow as a firm the leadership team I think our partnership is very focused on that like if we have the right inputs and that means are we investing in talents Are we investing in new capabilities? Are we expanding in areas that we think will help our clients? Then, hopefully, we will and we can deliver performance. We will grow. Let's talk about the legacy that you're in the process of defining. When your colleagues and your clients. Yeah. Look back. On the jeans, hinds era. Yeah. The CEO. They'll say you accomplished what We have made our collaborative Ecosystem stronger and that we we have it better firm as growing so we've been able to expand the partnership and that we are delivering most importantly we're delivering
Outcomes
GPE
to clients and maybe finally it's like to like it's more about like I do the previous
COS
ORG
have done and figure out ways to strengthen
Wellington
GPE
so that it's That we have
another 40 50 years
DATE
that the next set of CEOs can continue that this is a now this is a I'm just passing through in a steward of this firm that you know my
almost 40 years
DATE
here whatever whatever I retire that That I will know with you know know that this will this firm will be very strong for
the next 50 years
DATE
. Thank you very much. Thank you
Eric
PERSON
. I really really enjoyed our time. Hey Crucially important and I think we've moved from Attitude from it's an indulgence a waste of time almost an illness that needs a cure for something Universally important to human life as sleep mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding It's easy to memorize things that makes you smart if you can Act a lot of facts but if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what you bring figures out while you're sleeping.
Do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
. Business authority. So Like you're the CEO of Roblox but on Roblox you're builder man. You know that name it we just started up There's maybe
2 weeks
DATE
after we launched and we're all picking our own usernames Everyone picked one I just said You've had the same avatar since
2004
DATE
. That's right. That's awesome. Do you still play? I wish I could play the whole day. I have to be a CEO. So how often do you play? I'm probably on everyday but not as much as I would like. I have
four
CARDINAL
kids. I have a
9 year old
DATE
son who's on roadblocks a lot. He said his favorite games are the tycoon games. Oh lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory I have
four
CARDINAL
kids. Oh, you do? Yeah, they're now. They've grown up watching me do this. Yeah. Another, they're pretty savvy, social media people, but I'm optimistic someday. They're gonna be using
Roblox
PERSON
for some other reason. Like communicating or more working or something like that. And then they're gonna be, oh gosh, it's The robots. It's a Port Monto of robots and blocks where users can build and play games in a 3d world Global online gaming juggernaut that kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact
Roblox
PERSON
was building the
Mediverse
PERSON
long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. Really look like and how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co founder
David Bazooki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. Really excited to have this conversation. For parents and anyone out there who still doesn't quite understand. Our kids doing on
Roblox
PERSON
. Yeah, kids on Roblox aren't just playing. They're learning, they're hanging out together. Can't be together in real life they're hanging out on roadblocks they
Hiding
LOC
hiding goes sick they could be pretending they're running a store or a pizza parlor they could be making the next big game or adventure so it's really a wide range of things and it involves doing things together pretending you're together Right now it's mostly Games or experiences
four
CARDINAL
kids buy kids how old are these players how old are these developers we have young players who are getting interested in coding or
How old are these players? How old are these developers? We have young players who are getting interested in coding, who are getting interested in designing things, but more and more the community on roadblocks has blossomed into this
Rich
PERSON
ecosystem
thousands
CARDINAL
of developers making a living on the platform some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
a year so how many of these developers are really kids How many of these developers are now grown ups? Yeah, well, I think
two 1 million
CARDINAL
plus developers, a lot of them are grown ups and more and more. In addition to the natural organic people that started on roadblocks, we're starting up studios come in on the platform as well. Professional game developers who are developing on other platform Starting to take a look at it so our developer demo Although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, mus Does that change the dynamic of the class? I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever. By
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal studio would ever think of. But when developed by young creator, you know, we're gonna We're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it. There's gonna be a lightning storm. Like that kind of stuff. We see a lot of that creative game play coming from the younger developers. What were you I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time it was out in the boonies from
Minneapolis
GPE
,
Minnesota
GPE
. There were sandpits and so We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods the
one
CARDINAL
key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time and that kinda got me interested in this I also heard you were the captain of your high school TV quiz team. Yeah, so think of think of
Minnesota
GPE
in the
1970
DATE
's and
80s
DATE
where
every weekend
DATE
,
two
CARDINAL
different schools compete,
four
CARDINAL
students from each school, you know, and a really funny
four
CARDINAL
by
four
CARDINAL
configuration on a quiz Thing and so yeah Eden Prairie had a pretty good quiz bowl team. You eventually made it to
Silicon Valley
LOC
. Yeah. Went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid and you coming to life. You know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting. Took
a few months
DATE
off and I got really excited about there's this whole blossoming educational software marketplace at the
McIntosh
ORG
. It just been introduced and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software was very So when we looked at physics it was a whole different idea could we make a wide open labratory we could build anything any physics experiment bring it to life measure it see what it feels like you sold that company made some money became an investor and you invested In
Frester
PERSON
. Oh yeah, wow. I I had a friends to account. I'm dating myself a little bit. But I had a friend to account. I'm curious what you learn from
the early days
DATE
of social media. Yeah, so one thing I learned is it was really fun to invest Not my sweet spot. Like my sweet spot is trying to build and create things. I remembered I think having account
number 79
CARDINAL
on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interact
Physics
ORG
where we were simulating the world and then friends they're seeing how important social is those are a couple of the components that have come together in roadblocks so when you start a roadblocks in
2004
DATE
what was the idea back then the feeling of this new category for me started Almost inexirable. It's a category that people have been talking about in
sci
ORG
fi for many,
many years
DATE
. We've seen futurist talk about it. We've seen
For me started feeling almost inexerable it's a category that people have been talking about in
sci
ORG
fi for
many many years
DATE
we've seen futurist talk about it we've seen a lot of movies we
Worth
LOC
thinking yes immersive Experience. Kids flocked to Roblox during a pandemic. Of the pandemic
2021
CARDINAL
45 1 billion dollars
MONEY
market cap we spoke on that day even you have said that kind of growth won't keep up what kind of growth can we expect from roadblocks in normal times we believe Part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people gonna go to school in
Roblox
PERSON
? If I happen to be taking my science class and I can't get into the classroom and we're dissecting a frog. We'll probably dissect the frog in something like
Roblox
PERSON
on a sim Which I think is gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the world some of us will be in the office some won't having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipit Thing where we both happen to go over and chat. I think also is gonna be very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale?
Bloomberg
PERSON
has enhanced search on the terminal to deliver what When you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. A lot of the satellites have proposal systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines Satellites around but it's it's sort of like a harder problem now. The risk of Just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloud a debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built. A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in the space that I think is ultimately got so many years of growth to it and is a new category following other types of technologies. There's still so much innovation to be done and there's so Invention to be done in this category that is mind boggling. The term is just marketing. How do you respond to that? This type of technology is much more difficult than the net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zuckerberg
PERSON
announced his plan to Change Facebook's name to
Meta
ORG
as if it was something new did that kinda bother you? No, of course not. It's Hard to predict in
five to 10 or 20 years
CARDINAL
. Where did the companies that really figure it out? And there's so many elements of innovation that are needed. Having a
UGC
ORG
community,
one
CARDINAL
of our strengths. We think that's like a huge starting point for us, but we're early in our quest for innovation here.
Having a UGC community,
one
CARDINAL
of our strengths. We think that's like a huge starting point for us but we're early in our quest for innovation here. Roblox has built a huge business selling Does this evolve into a much bigger marketplace? That people would ultimately make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or utility so it has form this robust economy it's allowed us to keep robot you know
Roblox
PERSON
is free for the Majority. Would Roblox ever partner with some of these other companies working on the Metaverse whether it is
Meta
ORG
or Unity or epic or
Microsoft
ORG
? Technology of, you know, how are we gonna ultimately support
50 1000
CARDINAL
people in real time on a phone, going to a concert together and waving at your friends. I think that's gonna be a lot of engineering work that each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
one
CARDINAL
place to There I think they'll be lightweight ways of starting to think about that. So what role do you think
Apple
ORG
and
Android
ORG
should play in the Metaverse? And and would their policies need to change to really support this vision? The biggest thing we would Advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and apple kind of run their businesses. But when we think about more and more developers making a living on platforms like us and having to build stuff. If those store fees were to change, we would move most of that money back Developers. Your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job? In
the third week
DATE
when we were live you can go imagine
Eric
PERSON
and myself back in our small office
Eric
PERSON
and I said oh my gosh safety and civilities it's we're gonna have to do we had maybe
100
CARDINAL
people at the time chatting on roadblocks we saw a few not that egregious but early signs and we just made the call this is Be the foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes on our platform gets human reviewed we filtered texts very stringently especially for
13
DATE
and under players Use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us. After mistake are you about AI and tech being able to do that I'm really actually optimistic we would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think over time it'll get to the point where if a
6 year old
DATE
is on
Platform
PERSON
. It's literally as if the parents wanted to be there with them watching everything will be able to offer that type of thing. No, a lot of parents are terrified. They're terrified of a future metaverse. They don't understand the parental controls. Do you understand that feeling? We do. We actually have I think it creates a higher standard for us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know,
Playground
PERSON
for virtual fascist.
Kardashian
ORG
's own child Sex tape of her. Happened there. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the off our platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. The CEO of Alphabet and Google this question about kids and tech habits and screen time and he said it's something that even stresses him out you know this is the guy who runs one of the most powerful technology companies in the world I have
four
CARDINAL
kids you have
four
CARDINAL
kids did it stress you out like how did you
Something that even stresses him out. You know, this is
Guy
PERSON
who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? How much it's a responsibility of both platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together we're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either We're involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars
Crypto
PERSON
Have a world of young people. That won their own financial system. And their own culture. And it is very powerful. And I'm a big believer in it People ask me all the time what is the key to being a really good investor can I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars oh look way out like a science fiction writer and talk about it What I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
meta horizon worlds
PERSON
? Is
Found
PERSON
, you know, more experiences like that for adults. Ultimately, as fading into the background is a utility like the electric grid. Even those photo realistic and there's all these awesome avatars and connection Identity around the world. The things we start seeing built on this are wide range of things. So you imagine this not just for kids but for everyone That's one. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show? We would love it if one of our developers made a
Netflix
PERSON
show. So, we would, we would feel much more authentic if one of the creators on
Roblox
PERSON
who's coming up with avatars and stories and ideas and characters like that. We want them to be in the limelight. Roblox shares took a dive On the back of
Netflix
GPE
results which Plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being at a market like this, you know, where we think ultimately,
Billy
PERSON
and people are gonna use this Of technology and the other exciting thing about this market Many big inventions that still have to happen. It feels like we're pretty mature but inside our company, we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step. Consider more in game advertising. Yeah, there's a funny trivia. Note I would share to all the
Roblox
PERSON
fans out there. There was a time. The very
first
ORDINAL
way we monetize was advertising. And then there was also a time when we had pre-roll video on
Roblox
PERSON
. That's all gone.
There was a time the very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on Roblox that's all gone now it's gone for a couple of reasons we didn't want it to interfere with the Experience and also our our virtual economy has become such a powerful way to power this that we are able to take that down. In the future though, I think there's a certain type of advertising that is kids safe, that is immersive that doesn't get in your way. And how do you make sure that doesn't take away from the Of what makes
Roblox
PERSON
great. Yeah, I think our the people on
Roblox
PERSON
, you know, they're there to authentically connect with their friends and as long as what we're doing with these brands is very clear and non deceptive, appropriate for
those ages
DATE
. I think they'll they'll figure Balance of how much time do we go into a store versus how much time do we go to a crazy adventure tycoon and you know building amusement park together. So either way this could be a huge new revenue stream for you. I believe it's an awesomely Drive a new stream and at the same time we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face. Plays out which we hope it does and we have people of all ages on the platform and we're around the world. I think it's maintaining that civility as we grow, as we have older people who might wanna do it, go to a political rally, thinking ways to do that in a systemic way. That's a big challenge. It takes a lot of thought. I think thinking through the I I really like we're very technology driven company so it's fun to be running a company where we have to do this
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenge Super interesting. We do a little rapid fire section just to get this. Okay.
Awesome
ORG
.
First
ORDINAL
question what's your
morning
TIME
routine? Wake up Go outside on my porch do a CrossFit workout Take a shower go to work. Where are you most productive? Home or office? Both. Different types of productivity, home, zen state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show right now What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. I think it all gets down to the joy of health really like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Radio show. Yeah. Now that I've met you in person, I I get this. No way. You're pretty fun to listen to yeah what was your style like what was your Starting in college when I would have insomnia at
2 AM
TIME
I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
retalia all that just listen to the people calling in So I after acknowledge revolution was acquired. I had
a year
DATE
. I had a little time to dabble. My jam was really trying to talk about outrageous topics. You know,
Bling
GPE
, other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. You know, it's like call your mom. Please call It's really scary if you're a DJ and no one's calling inside. I I made it really controversial. I have people come on and debate interesting topics. If you could have dinner with
Steve Jobs
PERSON
or Walt Disney. You pick. You can't pick both. I guess I would have to slightly lean Disney just because he was not just the usher of the innovation but actually was kinda part of the some Innovation. But I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
? Life is short. It's such a valuable commodity. What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance.
All you will commodity What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the word balance. I would say can I Make my roadblocks job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job is a CEO? Every CEO job is different. Like I like doing it. So, can I figure out what my role is? You mentioned your co
Eric Castle
PERSON
. Yeah. Tragically of cancer. Yeah. In
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks? That roadblocks has become. I think he'd be It's a good question. Yeah. Like, I think he would you know, his both of his sons have worked at the company a bit. So yeah I think he'd be very He's just such a brilliant partner. Yeah Any he also set the standard for taking the long view on how we engineer things a lot of the technology at Roblox is still You know, his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So, in
5 years
DATE
, will the metaverse exist? In in the form that you imagine or is it take does is it Well it it's really interesting right cuz we're right in the middle of it right now in a sense with
50 1 million
CARDINAL
people everyday on our platform yeah it's already here and at the same time What is ultimately gonna be possible could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all, the matter is really has existence since Online dial up muds. Really? TwoD. Very simple. Text. You can call that the metaverse. It's existed in multiplayer gaming, world of warcraft, Exist now with more people and in
10 or 20 years
DATE
it'll exist photo realistically with
50 1000
CARDINAL
people you clearly have so much passion for this job Roblox your final stop on your journey. Well, definitely my final stuff but I think there's a lot of time ahead of me here.
Dave Bazuki
PERSON
, overall blocks, thank you so much.
David Weston
PERSON
. We think that's the next secular shift. Renewables. This is a level of uncertainty that we haven't had to deal with.
Ken Griffin
PERSON
is moving both sit it out and send it all security is to
Miami
GPE
the scoop was broken by
Bloomberg
PERSON
's
Amanda
ORG
Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications to softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the soft That is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
?
One
CARDINAL
of my sisters that traveled me said after
all these years
DATE
this still gets to you done.
Next year's
DATE
mother's grade. Matters to me. Hello and welcome. If you want a long view of the battle for racial justice and equality there are few better witnesses than my guests
today
DATE
. He went from pounding the streets of
America
GPE
demanding change to having a direct line to
the White House
ORG
. Attracting strong praise and sharp Criticism for his style and tactics along the way. He is a civil rights veteran, the reverend
Al Sharpton
PERSON
, who has been on the front line of many of
America
GPE
's most notorious police brutality cases including caring for
George Floyd's
PERSON
family as Black Lives Matter Test erupted around the world. So legend
James Brown
PERSON
was a father figure to him. And now aged
67
DATE
with a
weekly
DATE
TV and
daily
DATE
radio show to his name. He shows no signs of slowing down. He now has his latest book out righteous troublemakers in which he tells the stories of those who have protest thrown Them. Reverend
Al
PERSON
thank you very much for being with me and I thought I'd start by asking is that how you describe yourself a righteous troublemaker? You know I got the Thought of it from
John Lewis
PERSON
who was of course congressman and beloved in the civil rights Say make good trouble I think that I've tried to be a good trouble make all my life we'll come to your record and how that's worked and some of the tactics and how things have changed but who are you trying to give voice to in this book I'm trying to give voice to people that I feel made tremendous contributions but never got Visibility that I think that they were merited For example People in
the United States
GPE
and in around the western world. We're not know the name of of
Claudette Colvin
PERSON
.
Claudette Colvin
PERSON
whose story I write about in this book was arrested for sitting in front of the bus in segregated
Montgomery Alabama
LOC
refusing to Pussy.
Months
DATE
before
Rosa Parks
PERSON
but the local
Montgomery Black
ORG
leadership didn't wanna rally around her because they said she was too dark skinned and she was pregnant and was unmarried she didn't have the moral picture they wanted It was her sitting in the front of the bus that inspired
Rosa Parks
PERSON
. In fact,
Fred Gray
PERSON
was the lawyer for both of them. And I wanted people to understand that so Everyday people would know that you don't have to qualify to be a Make all freedom fighter
Now I wanted people to understand that so that everyday people would know that you don't have to qualify to be a troublemaker or freedom fighter Everybody has a contribut And these people are just regular people that did something that were made and yet some of the people that you're also talking about in the book have protest thrust upon them. It's not something that they set out to do and and because they find themselves a miscarriage of justice and they find themselves in the eye of the storm. Have you found their stories and at times I know you've personally worked with them and and try to get them ready for something like that. They're ordinary people. Would become AA milestone I talk about
Floyd
PERSON
for example
Felonis
PERSON
was just a regular guy in
Houston
GPE
Texas
GPE
George Floyd
PERSON
abused by police in
Minneapolis
GPE
All of a sudden They become a global News story
Anna Global Movement
ORG
But for long is unlike of me or unlike others didn't choose to be an activist he's trust out there and and that's one of the reasons why
Nash
PERSON
actually network has been involved in a lot of these cases If you had to remember when a police officer Is accused of a miss D all
Eric
PERSON
crime they have the police unions that back them up and provide them with lawyers and resources and if they need a therapist if they need People to help them with interviews that to advise them with media
Families
ORG
have none of that. They wake up
one morning
TIME
. Their brother, their cousin, their son is dead. Provides all of that cuz you need an institution To go up against institutions and we can provide all of that. You're talking there about the the organisation that you you head up to which helps people. I mean, you you say in the book, your job was to build a firewall of support around the
Floyd
PERSON
family to guide to protect them Even though what had happened was was horrendous and then became the symbol of a newly ignited kind of global movement. Do you think that they could be prepared for it? I mean are they still sort of coming out of that now? I think that they show tremendous growth and and Disability but they had to have people that would advise and guide them so the perception is that Old people like
Sharpton
PERSON
and others running when they're his trouble. No, we're calling. The
Floyd
PERSON
family called me. I mean, can you imagine you're mourning Your brother in this case Brother was killed how he was killed you're watching on television every night and how this is killing you but there's
10
CARDINAL
TV cameras outside your door that wants it immediately response and you don't know if you'll say something that might hurt the the case that you want prosecuted against
Elizabeth
PERSON
. So, you need people that are say, be careful, don't say that. Don't say something out of rage that they can use later. All Comes with building a movement and all of that happens to people that decide i'm gonna make trouble for system that's unfair but I'm gonna do it in a righteous way and that's why I talk about it. I got the idea of because when in the middle of
George Floyd
PERSON
, as we're talking
Minneapolis
GPE
. And I remember in the middle of my given delivering the eulogy just for whatever reason it hit me because I've always always been an extemporaneous speaker cuz I start So I don't use a manuscript And it hit me and I said, we need to march on
Washington
GPE
. We need to bring the issue of police reform and police misconduct to
Washington
GPE
. We had over 200 1000 people and I'm on my way to the to the steps where Doctor King had spoke In
1963
DATE
to make the speech after the families of of
George Floyd
PERSON
with me.
To the steps where Doctor
Kenya
GPE
spoke in
1963
DATE
to make the speech at the families of of
George Floyd
PERSON
with me family while I'm at
Aubrey
PERSON
with me family of
Jacob Blake
PERSON
family of
Brianna Taylor
PERSON
15
Victor
PRODUCT
family. We're all walking toward the stage. Any strongs of people I see an old man that was jumping up and down with an object in his head trying to get my attention and I said it is security around me I said What is that old man trying to tell me? They says, whatever we need to keep you moving. I said, Looks like he's in
his 80s
DATE
. He's trying to say something Go get them and they went and got them brought them to me
March
DATE
on
Washington
GPE
freedom now he said i was here in
63
DATE
with
Martin Luther King
PERSON
and I wanted to be here today with you and this is the button I want 60- And that kinda horned me. I never forgot that man. Because he just went back in the crowd and i said, you know, there are people that have paid a price. Went to the march. Went to the rallies. Someone went to jail. Someone killed That knew they were never gonna be in the newspaper
The next day
DATE
.
Call Lamacho
PERSON
. These people came
200 1000
CARDINAL
people in the middle of a pandemic and their own expense and their own risk why don't we that have the limelight put a limelight on some of them and that's where the book
Zeppelin
PERSON
. Do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Find people Analyze markets You can enter phrases Or ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Here from leading economists Policy makers. And industry experts. Be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars. On that point though I was wondering when you get that call you yourself because you have been doing this for so long Faith is obviously a huge part of your life How do you deal with that? Cos you still seeing Losing their lives you're still seeing these police brutality cases. I think if I didn't have a deep spiritual life and faith it would overtake me It hurts Over these funerals and look at these bodies over and over again I've done since
George Floyd
PERSON
maybe
10
CARDINAL
funerals of victims since that there's no way that would not wear on you unless you had a faith to believe that this is the work that you Born to do.
Rules of victims sense that there's no way that would not wear on you unless you had a fake to bleed that this is the work that you were born to do Watching families. I'm trying to comfort them and at the same time, asking myself, god, how long will this last? How many times do we have to go through this before the laws are changed? So, if I were to tell you it didn't get to me, I would be lying. Tell you and I wrote about this in the book after
George Floyd's
PERSON
funeral Last one in
Houston
GPE
and we had the long motorcade to bury him
next year's
DATE
mother And I remember I did the prayer I did the commitment of the body and then I hugged the family and I left ahead the airport to head back to
New York
GPE
And I had my head down in a little teary eye and one of my sisters that traveled me said after
all these years
DATE
this still gets to you dug it Let me tell you something young man the minute it does matter to you anymore you need to leave the movement it matters to me
One
CARDINAL
of these deaths. How much do you feel faith is is Answer the politics of
America
GPE
though because it is it's very distinct when you're looking in but it's so linked and you can see people on different political side Sending their views or using sometimes
Christianity
NORP
in particular to say this is God's will. Did you think that faith is being weaponized in
American
NORP
politics in a way that that is just unhealthy? That it is definitely been weaponized in a way that's unhealthy because I think that we've used faith as a way of Making people Or the other that believe wicked and therefore if you can make them wicked and make them some kind of of anti with god would want did it justify treating them on equally and treating
Unfairly
PERSON
. Which is why I think people of faith have to say I'm motivated by my faith but I wanna protect people's rights. They may not even have a faith. I remember when I came out for LGBTQ rights.
Many many years ago
DATE
. And I even supported gay marriage You on that Marriage and I said, well, okay, then, I'm not coming I think when there is just a blurring of the lines as they're still seems to be in
America
GPE
at times with faith and with politics. I mean it can be that people do not say it as the law they see it as imposing people's views on them and I I wonder what you think would come An atheist president of
America
GPE
or a female? President. Well, I don't I'd probably would say a female president Oh but i don't rule it out I mean when I got started as a as a youngster in the movement I never thought I'd see a black president so it's it's it would not We already now have a female vice president. Indeed, well, it's it's still not happened but I suppose whatever political side you're on, the candidate has to believe in god and has to prove it in some way. Which it's it's striking regardless of how you come at it. Just talking about the phrase righteous troublemaker And I was thinking about what happened
just over a year ago
DATE
on the Capisup You know those rioters Would probably describe themselves in a similar way as righteous troublemakers. They believe in what they are doing. They believe in what they're marching for. And I suppose what would you say being someone who's protested your whole life? And being so divided from those with a view who have of what they're doing being just as worth What you're doing? What will make the difference of whether what you're doing is righteous or unrighteous is the end goal What are you trying to do they were there that day January 6 Stop the certification of an election that the
American
NORP
people had chosen a president if you gonna have a righteous cause the end the golden
Stop the certification of an election that the
American
NORP
people had chosen a president if you gonna have a righteous cause the end the goal must be righteous and your behavior to achieve the goal Be righteous. Because some say what happened on the capital was the beginning of something not the end of something and
75 1 million
QUANTITY
people voted for
Trump
ORG
in the last election and I I just wondered from your side of things as it were How do you see this playing out if the sides just can't talk to each other because you've you've built movements? That I agree with those that say
January 6
DATE
was the beginning
Something
NORP
. They are not going anywhere. They have gone into states now changing voting laws. Are they built an infrastructure around this big lie that
Trump
ORG
really won? And that they want to in some way control how votes are counted and how votes are done I think we're in for a long season Confronting, voting rights, and different sides opposing different sides on these questions. And I don't know that we are going to be able to get to this dialogue of healing of for
a minute
TIME
now. I think this is going to play itself I think the election
Joe Biden
PERSON
and
the 4 years
DATE
of of
Donald Trump
PERSON
has divided
the United States
GPE
border and I've seen it in my lifetime. Are we in some sort of calculation fears moment people are talking about that
all day
DATE
yesterday People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with The best investors you can find. I'm gonna take you to meet the greatest investors in the world. The people that I would like to have managing my money. At the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Independent. Information and insights. From businesses most influential and instrumental. This is a level of uncertainty that we haven't had to deal with. Television and radio Looking at movements that are looking at how things can hopefully get better or improve. Of course, as I say, you've been protesting, you've been on the streets for a long, long timer, and and you've seen things that you couldn't have imagined like a black president, like you just said. But I was just thinking about tac And changing approach of course many hail
the Black Lives Movement
ORG
protests because they didn't erupt in violence they didn't erupt in riots although their have also been divisions within that some factions calling for the defunding of the police A word on that You on that? And and where do you think the movement is on that? Because there is the vision. Is any movement there's always gonna be disagreements within the You know I grew up in the north the year
Martin Luther King
PERSON
was killed I was
13
DATE
I was already youth director There are people that disagree with Doctor King. They believed in For coming out against the
one
CARDINAL
Vietnam
GPE
saying that we should be For whatever president
John
PERSON
's
Oh then you had those on the other side that it condemned Doctor King for coming out against the war in
Vietnam
GPE
saying that we should be For whatever president
Johnson
PERSON
wanted cuz he was a good civil rights president. So, these disagreements exist. I think that we need to Form the police but we need to keep measure of policing in our communities cuz we have high crimes. You've got as much a problem with gun violence as you have a problem of dealing with police that are over the line and do things that are wrong and that in in many cases Criminal. Funeral I did the eulogy of a Year old child that was killed in a crossfire of games fighting in
Brooklyn
GPE
so we need both we need good policing Funded properly that deal with things like mental health and gun control. And there's also of course this push and hope that the police themselves will report bad cops will also come forward and and have that culture change within there as well as the the training and the policing that they've got to do that you talk about. I'm Thinking about people who maybe thinking of themselves in the way that you've described a righteous troublemaker talking about making good trouble as you said right at the beginning of our conversation and and if you think about to your your younger self And how you've changed as a protester and your tactics Your biggest regret and what's the lesson you've learned? Is that you should not From the hip. We often say tit for tat report or somebody say something. I'm almost at at the beginning of their last word answering the Be more thoughtful to make sure whatever you say And whatever you do and whatever tactics you use is taught achieving the end goal that you profess cuz people are depending on you And they expect you to be thoughtful not just theatrical.
One
CARDINAL
of the controversies that is still brought up by your critics is your response to the
1991
DATE
crown heights riots in
New York
GPE
. To to remind our viewers these took place after a
7 year old
DATE
black boy was killed in a motorcade. By motorcade transporting a rabbi
Broke
ORG
out after that death and a
Jewish
NORP
student was killed. Your critics say you never called on the rioters to stop their antisemitic inspired violence. Is that fair? That's totally erroneous As the state of
New York
GPE
did a study I was not even in crown heights when the rabbi young rabbi student was killed how was called by the family of
the 7 year old
DATE
kid
the next day
DATE
but many and the friends right wing tried to start When I was living in
New Jersey
GPE
but these are kinds of things that you have to deal with And you keep going. That is not only unfair, it's untrue. That's why, that's why I wanted to ask you about it. I mean, you did mark the
20th
ORDINAL
anniversary of the incident. You wrote her an opinion piece in
the New York Daily News
ORG
and you said, our language and tone sometimes exacerbated tensions and played to the extremists There was a response from from the young man's brother who who responded saying he felt your recollections were were sanitized and and distorted so that there's obviously still a lot of hurt and pain that Talking
30
CARDINAL
what how
many years ago
DATE
all you have to do is go to the state report who by the way criticize
David Dinkins
PERSON
the man in anothers but said
Shop
ORG
there was not there now I said that when I came in Maybe I could have as I did the eulogy for the Kids funeral said more things that would have been that I they would say differently but to say that I decided or or excuse violence it's just not true and even in his brother's state Leadership I suppose that you've had it's about also learning from that which is what I wanted to ask you about because
It's just when you are looking back at tactics and how protests happen and the leadership I suppose that you've had it's about also learning from that which is what I wanted to ask you about because you'll be well aware of these criticisms over
the years
DATE
.
Martin Luther King Speak
PERSON
to that and that's what I've had to learn. Just wanted to ask about the next generation of leaders that you have in your sights particularly around racial equality are there some that you are particularly keeping Ion. Many of my national action network and some beyond that I'm looking at I won't call names but there's some that are very impressive and I tell them that they've got In their generation what works and they're gonna be tested and you're gonna be criticized and being a troublemaker you're going to have trouble because the fact that you're questioning speaking truth the power power is gonna answer you so make Absolutely committed. They wanna be there to do that. But keep your eye on the prize. Don't make my mistakes. You can study people like me and others. But study also where we fell short and correct them as we go. I know some health I imagine. You have You can keep going for longer I suppose if you don't mind me mentioning you've lost an enormous amount of weight and you post about drinking your kale juice everyday and you look great I've lost
176
CARDINAL
lb over
the last 4 years
DATE
I have a vegetarian eat
one
CARDINAL
meal a day workout a
35 minutes Morning
TIME
and I'm in better shape now at
67
CARDINAL
than I was at
37
DATE
. Well, long long may I continue and do you work out listening to
James Brown
PERSON
? Of course, he was good. He was like my dad
First
ORDINAL
time I went to
London
GPE
James Brown
PERSON
brought me he played at
the Hammersmith Odium
FAC
And I work with
James Brown
PERSON
. He brought me to
London
GPE
and I listened a lot of his music is up temple so it helps me when I'm on the elliptical or lifting weights That's what you're doing it too. At Reverend
Al Sharps
PERSON
and thank you very much indeed for your your time, your recollections, and and some of your lessons. Thank you. God bless. Thank you so much for being with us. Until we meet again. Mask up. Stay safe and goodbye. Do you see that?
24 hours
TIME
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On Bloomberg Wealth I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped I say Same thing
today
DATE
about the climate revolution. Renewables. This is a level of uncertainty.
Bloomberg
PERSON
television and radio Former President
Trump
PERSON
strikes back. Wall St Week. I'm
David Weston
PERSON
. This
week
DATE
's special contemporary
Larry Summers
PERSON
of
Harvard
ORG
on where the housing market is headed. Softness in the future with respect to housing. International finance on the risk and the opportunity of zombie companies. Money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere. It was
a week
DATE
of signals. Some subtle and some not.
China
GPE
sent an unmistakable signal that it's economy is slowing. Something that a
10
CARDINAL
basis point rate cut doesn't seem likely to fix. She is confronting a number of both you know short term and long term challenges right now I probably the number
one
CARDINAL
thing is the poor performance of the economy. Former President
Trump
PERSON
kept up his attack on
Republicans
NORP
who supported his impeachment though Congressman
Liz Chaney
PERSON
of Wyoming said she wouldn't stop even after she was soundly beaten in her primary. Said since
January 6
DATE
that i will do whatever it takes to ensure
Donald Trump
PERSON
is never again anywhere near the oval office and I mean it. And there was nothing subtle about the inflation signal we got out of
Great Britain
GPE
coming in
over 10%
PERCENT
and apparently headed even higher. I'd go to the
UK
GPE
where you're seeing an explosive move higher in
UK
GPE
guilt yields
Tom
PERSON
and I don't think I'm overdoing it using that language
Balancing
GPE
over 10 Over in place and expectations becoming entrenched. Beneficial noted that some parts of the economy notably housing. We're starting to slow as a result of higher interest rates. And if you wanted confirmation of just how big is those fed minutes were just take a look at the markets
this week
DATE
with the S and P
five
CARDINAL
Shooting up on
Tuesday
DATE
only fall back down to earth and beyond on
friday ending the week
DATE
down one. Two% at
42 28
DATE
and the Nasdaq was even worse again climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt by And then they got just under three% At
297
CARDINAL
. To help us understand what the market may be trying to tell us welcome to
Bob Prince
PERSON
he's co chief investment officer for
Bridgewater Associates
ORG
and
Ed Heyman
PERSON
chair of Evercore ISI and vice chair of
Evercore Partners
ORG
so And let me start with you. You follow the economy and what's going on with the economy. We've talked about the markets. We've talked What's the economy telling us Well, you can't wait. It has
two
CARDINAL
parts to it. Obviously,
one
CARDINAL
part is what the real GDP is or auto sales, then there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part Economy is doing.
Your auto sales then there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part Economy is doing okay as you know we serve a companies And our retail survey dropped sharply
this week
DATE
but still pretty elevated Housing is really getting hit But on balancing economy is doing okay I think it's probably going
two
CARDINAL
or three% but headed to one% Recount I'm sorry bank loans came out
this afternoon
TIME
and they're up
11%
PERCENT
now And retail sales
this week
DATE
we're you know pretty decent On inflation which is much more important I I'm pretty convinced inflation is slowing Oil prices came down gasoline prices came down And In the weeds used car prices dropped about
three%
GPE
and
the latest month
DATE
And we survey retailers pricing power that's now plunging you've heard the stories about the inventory is being high and we have been tracking that for a long time it's now really coming down. But the most important part and we don't get my state on this or wages. And obviously the labor markets are very tight But they had from the conference board
this week
DATE
A measure of CEO conference with almost a record low. And then another survey That showed
80%
PERCENT
of workers were concerned about policing their job. Go figure that. But we serve a employment agencies
every week
DATE
And ask him among other things about wage pressure and that's now pretty clearly hooked down. So, I think you're beginning to see some moderation in wages on top of, you know, prices now cooling And the economy is calling So
Bob
PERSON
adds
season
PERSON
started to come down questions how fast is coming down but start to come down how do you see it and is it coming down enough and fast enough so the federal not Much further in red hikes It's definitely But the question is where is it settle out And doesn't settle out at the level that the
Fed
ORG
expects it to and that the markets are discounting The markets are discounting
two and a half
DATE
And you know, we're coming down from
six
CARDINAL
So or higher on the core, right? So, but there are really
two
CARDINAL
big imbalances in the economy right now that are need to be resolved through this tightening cycle and we're we're still in this tightening cycle It's it's too early to really see the effects. It hasn't been that long to see the effects and so chances are you're gonna get more that weakness as you as you go along. But there are there are
two
CARDINAL
big imbalances in the economy right now that that they're gonna have to be resolved.
One
CARDINAL
is the level of nominal spending in relation to the to the output capacity of labor Over
the past year
DATE
, nominal spending is up
10%
PERCENT
. And incomes rub
10%
PERCENT
, and if incomes are up
10%
PERCENT
, that gets spent, and it, and you get more spending at
10%
PERCENT
. But labor can only produce goods at the rate of four%. You get a
six%
NORP
inflation rate And that's the basic that's the first imbalance and that's the basic cause of the inflation that we have right now. It's really not the supply chain. It's just too much spending Which came from the monetization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of nominal spending in relation to bonyards. So nominal spending is even higher above bond yields than it is above output. It's, you know, seven, seven%, above bonus. So, it's a highest in
60 years
DATE
. So, if, if, if spending, if people's incomes are growing Well beyond bony yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit and so that the the credit numbers it is referring to loans up
11
CARDINAL
You know that's a backstop on the economy and spending so so it's it's the high level of spending an incoming relation to interest rates and and late
Backstop. The economy and spending. So, so it's it's the high level of spending an incoming relation to interest rates and and labor labor production And it's the availability of credit Sustain that. To bring about an equilibrium. Quickly there. It's one of the issues here. Where did you say that's the hardest get your arms around? Where are with wages and that wage price spiral? Because in fact, if we are gonna have continuation, people are gonna wanna make more money. They're gonna go to their bosses and say, you need to pay me more. Well CEOs now are really bearish so they're not gonna be happy if you have and see you on but your
Bob
PERSON
and I think about the same way But money growth has been slowing for
about 18 months
DATE
. We'll talk about that because it was growing gangbusters for a long time. Right. But you're saying it's turned around. So, in the conventional way, you had the checks you had the quantity of easing in low interest And so money growth got up to
almost 30%
PERCENT
. Which is obviously extremely fast and that's why you have the strong number growth. Now, with figures I got
this afternoon
TIME
on bank deposits money growth is well less than five% And so we've set up the mechanism for this novel growth which is way too fast To slow down but that's what has to happen and obviously, this is a really interesting thing. If it slows down, Come out of real growth or out of prices If you have your
10%
PERCENT
normal growth which everybody can understand I think Right now it's about
one%
ORG
real and a nine% price right and if you go to say five% nominal Of what's the mix then? Right Should that fix the inflation problem or at least take us a long way before fixing it the Your total internet economy there your total sources of funds is your sources for spending and there are
three
CARDINAL
sources there's money
Credit
ORG
and there's income Right? And so when you get to tightening a monitor policy, they're contracting money and that's absolutely right The
first
ORDINAL
effect of a contraction and money is on asset markets. Because if you think about the printing of money by the by the federing of
the Central Bank
ORG
. They print the money and then they go buy bonds or they print the money and that money then goes into stocks. So that money most directly affects the financial markets Credit more goes in to spending right because you know you you take out an auto loan to buy a car you don't take out an auto loan to buy a bond and the
fed
ORG
doesn't print money to buy a car they print money to buy financial assets so so what you have is a push pull The contraction and liquidity from the central bank is a drag on the financial markets While they're expansion of credit Support the spending And so you've got you got that work in both directions right now. Well, that's interesting to me at least credits going up. That sounds like it's good. It's gonna spur growth. But that makes Like that's actually gonna make me implementation worse. Does the
fed
ORG
need the credit to come in? So, probably. So, in my view of it, which is a straight
Milton Freeman
PERSON
Take of it of those
three
CARDINAL
pieces that
Bob
PERSON
point out the
first
ORDINAL
one is where it starts. Is money growth. And I track global short rates. It's a global economy and they have a higher impact on the
US
GPE
economy than fed funds. And they've been going up for
about 18 months
DATE
. Same time that money growth has been slowing. So, I think we're pretty deep in this and we had a pretty good drop in the stock market to your point And and now inflation's coming down the markets are
Beginning
ORG
to think that this is Introduction to the next chapter That the next peel of the onion. He's exactly right. So, the money is the
first
ORDINAL
thing, right? The but what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent
Right. So, the money is the
first
ORDINAL
thing, right? The but what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent effects, right? Which means Have to be in a tightening cycle for long enough for that to happen. Right? And we've been in a tightening cycle for how
many weeks
DATE
? If you look at
18 months
DATE
. Exactly. It had you have to be a long enough, right? And so, you know, as we look forward We think that there's there's gonna be it's too early to tell really how this plays out in terms of whether it's wheat growth or high inflation or which one but Probably gonna get some combination of wheat growth high inflation and rising interest rates. Right And all
three
CARDINAL
of those are are rough on asset prices And the mix is gonna be determined mostly by how aggressively the
fed
ORG
And other central banks tighten and and stay tight if they have to pay the price of a downturn. Turn next. So, what is really important for investors? So, it's too soon to tell. What are we doing in the meantime? Well, we're waiting for those answers.
Bob Prince
PERSON
and
Ed Kimon
PERSON
will be back with us for more Wall St Week after the break. Aid in the
USA
GPE
but the sign on the CEO's door often says made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mejotra
PERSON
and that's
Gap VM
ORG
ware and that Count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top? But no coastal To
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a New construction contracts faltered and while unemployment actually went down more significant was back to back
monthly
DATE
declines and paying jobs. The bottom line seem to be that the economy was beginning to move forward but with many are lagging part And overall all at a pace
Embarrass
ORG
the tortoise. That was
Lewis Ruckheiser
PERSON
on Wall St wave back in
August of 1991
DATE
when
the United States
GPE
had just come off of a rosely mild and short recession. The number
one
CARDINAL
song if your murder was
Brian Adams
PERSON
, everything I do, I do it for you and the top movie was terminated too judgment day. Still with us or
Bob
PERSON
, Prince of Bridgewater, and
Ed
PERSON
Hyman have ever core. So, it's Different world today
Bob
PERSON
for example on the job situation we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are on the tightening cycle what comes next what is that say to an investor Well, right. Now, we're in that in between stage right now, right? So, you, if you, if you go back just to not too many months
What is that say to an investor Well, right now, we're in that in between stage right now, right? So, you, if you, if you go back just to not too many months It it became evident that we had a self sustained inflation that there was gonna be a tight near monetary policy the markets price that in yields went up You got to take me in a policy it's still happening It's not over
Marcus
LOC
got a little bit excited about the dip in some of the inflation. They started by down that yield. But bet we've already given up
half
CARDINAL
of the yield rise that occurred in that actually means the
fed
ORG
needs to do more than if the yields had stayed up where they were, right? Including equity. So, So we're still in this thing we're still in this tightening cycle And like I said there there are really there's gonna be a mixture of
three
CARDINAL
things and you don't know what the mix is yet cuz it's too early to tell but you're gonna get some mixture of wheat growth, high inflation, and rising interest rates. The more the interest rates rise, the more it's the wheat growth, Less the interest rate rise the more it's the high inflation Text the foot off the break you're gonna that that inflation improvement's gonna go away and you're gonna you know they're gonna favor growth so you don't know which which how they're gonna play it quite yet. So what we try to do in this kind of environment is is maintain some balance, right? Diversification, obviously, don't Too heavily committed to anyone direction but also even within the equity market you know structure and equity portfolios that have AA cash flow and balance sheet base under them. So that if if you tightening is very aggressive that there's Strong enough balance sheet to hold that up to to sustain their their position in the markets or sustain a positive cash flow and I think that they companies that are you have a lot of debt in relation to enterprise value or vulnerable profit margins that sort of thing. You know are they are the type that are Vulnerable for that environment. An awful lot hinges on the
fed
ORG
. Surprise, surprise.
Jackson Hole
GPE
coming up
next week
DATE
, okay? A lot of people are in paying attention to
Jay Powell
PERSON
, what is the same? Remember,
last year
DATE
at this event, he was talking about transitory still. That doesn't work so well
this year
DATE
, right? So, how much guidance can the
Fed
ORG
give us what exactly where they're heading? Just talking about. Well, it's hard to hard to know. I do think we're gonna get a financial crisis somewhere. Somewhere pretty soon It's always been part of the of the tightening cycle But like you point out David, yo,
last year
DATE
, it was really about transitory. He had
five
CARDINAL
Went through
five
CARDINAL
different things that were proved transitory And I I personally think the fit is now on the other side of the wrong foot. They're doing the entrenched You know,
a year ago
DATE
, I thought
Bonnie
PERSON
is a good a five% and fed funds go to five% and I'm not quite sure what's happened but your money growth gets slow dramatically And combine prices here and come down dramatically and now I'm seeing pricing power coming down and so I think we've made a lot more progress on inflation than I expected and and that's why the market was going up until
today
DATE
but that's that's If inflation keeps coming down Then the market is gonna appreciate that. So, one thing I don't understand,
Bob
PERSON
, we heard why
Ed
PERSON
thinks the feds job maybe he's got a bit easier actually with some of the things that have happened But financial conditions actually have not tightened. Actually, if anything, do that in someone looser. That makes the
fed
ORG
job harder, doesn't it? Literally
the first quarter
DATE
that markets were doing the feds job entirely. Yeah. And then the
Fed
ORG
joined in and once the
Fed
ORG
joined in and the market saw some, you know, positive signs of inflation. You know, they actually pull back and so, bonus came back down, equity yields, you know Came back down And so You know that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted. If if yields had stayed where they were It would be that much less that the
fed
ORG
needs to do but the fact that the yields have actually dropped some and can kinda give it back some of the work that they were doing is that much more that the
fed
ORG
needs to do. And so I think you know it's
But the fact that the yields have actually dropped some and can kinda give him back some of the work that they were doing is that much more that the
Fed
ORG
needs to do. And so I think you know it's
Ed
PERSON
referred to last that you know you you raised it and then you know we
About last year's
DATE
Jackson Holstein
ORG
but They were clearly wrong about transitory inflation if if you actually look at the indicators that they follow and they tend to be lagging indicators I haven't heard yet an explanation about how they think inflation, why they think there is an inflation, why they think that that was wrong, and I think that that causes some cause you to question How well this this process is gonna be manage is gonna be very tricky. Powerful point I think does a
fed
ORG
need to explain to us what went wrong and why they're not gonna do a mistake again for us to really believe in this time. Oh, be helpful. But you know, from my vanished As you can see What they missed was that fiscal stimulus quantitative easing led to a
30%
PERCENT
increase in the money supply and that did it and if you look back at that
Jackson Hall
FAC
they completely missed that. Now money growth is plunging and commit prices are coming down. All sorts of signs that are early signs and so the job's not Or by any means But there's progress If you look back like the 70s when inflation peaked The stock market started to respond to that. When you had a very high inflation period, like we have now. Do you agree with
Ed
PERSON
that in all I could have some sort of financial crisis? That's what happening happens Serious tightening cycles. Odds are pretty good yeah Yeah I mean we haven't had enough tightening yet to really have that Odds are good. Yeah. I mean, we haven't had the downturn yet. If there's gonna be a downturn, it hasn't happened yet. It's gonna be hard to bring inflation down. Are you gonna bring nominal spending down from
10%
PERCENT
to five% Without a significant Credit you need to slow credit growth by
about half
CARDINAL
money growth is slowed but you need to slow credit growth in
half
CARDINAL
but it's still rising you're gonna have to you're gonna have to hold interest rates up enough and that's when thing that's when bad things happen I have to tell you this is not a bad thing it's Free to have the
two
CARDINAL
of you here in
Walsh Review
ORG
really thank you so much that is
Ed
PERSON
Hyman I've ever record and
Bob Prince
PERSON
of Bridgewater coming up we'll take a look at what's coming up
next week
DATE
on global Wall St that's next on Wall St on
Bloomberg
GPE
. We're going to step by step electrify everything and what does that mean? This is Wall St Week. I'm
David Weston
PERSON
. Let's take a look Coming up
next week
DATE
on
Global Wall St
WORK_OF_ART
starting with Julia
Sally
PERSON
in
Singapore
GPE
. Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan prime rate also on the
Slater Intro
PERSON
Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan prime rate also on the
Slater
PERSON
interest rate decisions from
Central Banks
ORG
in
South Korea
GPE
and
Indonesia
GPE
inflation figures from
Singapore
GPE
and
Hong Kong
GPE
trade data Earnings across the region include
Qantas
GPE
,
Patro
GPE
,
China
GPE
, and food delivery, giant meat one,
Bloomberg
PERSON
,
Intelligence
ORG
forecast,
Chinese
NORP
companies, maybe set to report their worst earnings
2 years
DATE
. In
Europe
LOC
for
the coming week
DATE
will be the energy crisis in
Europe
LOC
and we have a lot of developments in
the week
DATE
prior you had the wine dropping to levels that made it untenable to have shipments across it you had record high energy prices in
France
GPE
and
Germany
GPE
you also had
Matt Gaps
PERSON
prices reaching new records as well so We head into
this week
DATE
the question is going to be how this impact industry how would impact individuals will there be more demand rationing and demand destruction we've already seen some of it with different industry having to shut down power plants but how much worse can it get and what will be the impact on the economy Big weekend economics we have the
Jackson
GPE
wholesome posium coming up and I think our
Bloomberg
GPE
economics team really focused to hear some hawkish comments from chairman
Jay Powell
PERSON
reassuring the market there was no pivot and that we are still a go in
September
DATE
for
50 or
CARDINAL
75
CARDINAL
basis points away from economics How do they sort of continue to grow in the face of further reopening trade maybe less to demand for that product finally peloton we've heard a lot from this company about Some of the bikes at home, a lot of cost cutting initiatives, all the help sort of get that company back on track. That too will be a key focus for us
next week
DATE
. Thanks to Julia
Sally
PERSON
,
Danny Burger
PERSON
, and
Taylor Riggs
PERSON
. Well some of those who maybe caught are those so called zombie companies who've loaded up on debt when it was cheap. International finance. That's next on Wall St Week on
Bloomberg
PERSON
. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 and
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce about three% of all the world is huge
two
CARDINAL
I'm from shipping. Sent me not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths?
To help reduce the emissions from these well stocked maritime behemoths. BSO Now your online home for
weekly
DATE
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ORG
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ORG
performances see new concerts that go behind the scenes plus acclaimed archival concerts visit
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ORG
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Bank of America
ORG
It was nice while it lasted all that support from the
fed
ORG
from oh interest rates. Enabled All of which allowed companies to borrow as much as they wanted which was worrying to rust costric of black rock
as much as 4 years ago
PERCENT
. The
800
CARDINAL
lb gorilla which eventually we're all gonna have to question is whether or not this build up in corporate leverage which we've seen over
the past 3 or 4 years
DATE
is that sustainable But now those happy
days
DATE
are over as the
Fed
ORG
has reversed course and says it will keep raising rates until the inflation dragon is slain the idea that we are going to start cutting rates
early next year
DATE
when inflation is very likely going to be well well in excess of our target I just think it's not realistic where Leave all those companies who've borrowed so much. Well, at least some of them are so called zombies. No not those zombies companies that don't generate enough cash to pay their debt and that leads economists like
Neuro Robine
ORG
to say we're going to see some of them fail which may just be what we needed to get to the other side. Your tons of firms that were highly Now that the weather tightened As inflation is higher the zombies are gonna collapse. And to take a series of strange and exotic world of zombie companies who are gonna have
Sonia Gibbs
PERSON
she's managing director and headed sustainable finance at
the Institute of International Finance so Sonia
ORG
thank you so much for joining us on Wall St Week let me start with those
Zombie
GPE
company and how many of them are there out there
First
ORDINAL
of all, to take a step back. What you need to think about is that over
the past 10 or 15 years
DATE
, global debt levels have skyrocketed. We've had very low interest rates and for example, non financial corporate debt around the world is now close to
100%
PERCENT
of GDP. And that's more than double what it was Decade ago so that's a very worrying backdrop And so what we mean by zombie companies is a company that essentially has to borrow to keep going. They are highly leveraged. They're not growing very fast. They're revenues are not up to par. And at the moment they face a very difficult situation you've got higher input cost so your commodity prices are higher wages are rising at the same time you don't earn enough revenue to cover all of these higher costs and your debt service so if you have a ratio of reven To interest costs that's
one
CARDINAL
or less if you can barely cover your debt service cost we call you a zombie company and it's a very good name it's very evocative For how many amuse is difficult to calculate right because for a lot of firms that for example aren't publicly listed the information might be less available it might be smaller non-public companies The federal reserve estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
firms fall into this category It's also important to remember that this is not a static world. It's not once a zombie, always a zombie. Conditions change and in fact, becoming a zombie company is a little bit cyclical.
Static world. It's not once a zombie always a zombie. Conditions change and in fact becoming a zombie company is a little bit cyclical. In the sense that when times are good maybe interest rates are low. Growth is high. Maybe you're not a zombie. But then, you know, bad things happen. Pandemics happen. Shocks happen. Interest rates go up And a company that was formerly doing reasonably well Might suddenly fall into the zombie category. So so you mentioned the overall debt load it's true certainly in
the United States
GPE
and not just in
the United States
GPE
and part because interest rates are so low there's some very very successful healthy companies that loaded up on debt cuz it was so cheap but and whenever we've talked about this risk in
the last few years
DATE
I said don't worry as long as interest rates are low we're fine it looks like those days maybe on their way We're gonna have higher interest rates. So, what kind of pressure is that put on these zombie companies? Well, I think it's a good analogy, right? It's all fine until it's not. And so you've had AA kind of a confluence of factors that have hit pretty much at the same time. You had a pandemic which hit growth. You had commodity price shock. You have writing inflation. You have Interest rates and you also have firms who's who's business models. For example, have been entirely changed by the pandemic. I mean, amongst the list of zombie companies you might find a company like
WeWork
PERSON
, you know, a company that has been very successful but at the same time, the pandemic has changed a lot of things for that for that company
Carnival
ORG
cruise lines is another good example of a type of company who's now in the zombie category or some of the meme stocks, you know,
AMC
ORG
, your game stop. So, these are really household names and I think that the difficulty is at a point in time when you've got wages rising, when you have higher input costs. These firms Be able to borrow as much as they need to borrow to keep afloat. Tend to find zombie companies concentrate in certain sectors or in certain size corporations. So, I think it Percentage of zombie firms are probably in manufacturing and in retail and retail of courses in industry that's undergoing secular change over the long term as we move to sort of more online no less brick and mortar think there are there are underlying structural issues there and in that In any case but I think some of the companies that are hardest hit tend to be smaller firms and if you think about a small company there's sort of inherently face greater credit risks than some of the larger better established companies that have long standing histories and track records in borrowing their you know famili To investors smaller companies have a harder time accessing funds especially when when borrowing conditions are are difficult and with some of these companies having fallen on hard times during the pandemic You know there are estimates that suggested in some cases
as much as 25 30%
PERCENT
of the small cap companies especially if you include unlisted companies could be falling into this sort of zombie trap I wonder say about the larger effects on the economy. Obviously, we don't wish ill for any corporation but there's gonna be a lot of stress put on a lot of the companies you're describing right now. Ain't so far is that all gets sorted out to use a eufacium perhaps. Is there some benefit for the economy and redeploying the capital they represent into things that might be more productive than Enterprises. Think about this in a short term and a long term context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here which is spent over
800 1 billion US dollars
MONEY
since the pandemic hit to support its companies so you avoid bankruptcy, you keep people employed, you keep these companies float, but there Longer term cost to be paid for that because when you think about it
Zombie
GPE
companies afloat is money that could be more productively deployed elsewhere. You could put it into capital spending. You could put it into infrastructure. You could put it in a new industry, it's new technology is maybe in the ESG world or or green technology that can really deliver A boost to productivity and growth. So it's kind of a foregone opportunity in that sense. At the same time for the reason you describe.
That can really deliver a boost to productivity and growth. So it's kind of a foregone opportunity in that sense. At the same time for the reason you describe and the example of
Japan
GPE
is a good one. It strikes me. There are political consequences of letting zombie companies go belly up. You know that the politics of these things are are always difficult, right? In
one
CARDINAL
of the the conclusions that you can come to is that if you have a high proportion of of zombie companies. If you have companies that you're worried about keeping afloat. There's political pressure to keep that going. The more that borrowing cost rise, the more that interest rate rise, the harder time these companies will have keeping going. So if you're in a world where inflation is rising and you have central banks having to make a very difficult balance Controlling inflation and supporting growth which can involve supporting some of these less profitable companies. You know, it's a it's a it's a rock and a hard place. You know, where do where do you draw the line? If in fact the
fed
ORG
could hippie held responsible for this many companies and maybe it's not within tent but it's certainly was a consequence of extraordinary low interest rates for a long time. Oh, I think ultimately, it has arbitraries of the price of money. You could hold the
fed
ORG
responsible for everything really but certainly, it was an inadvertent consequence Of low interest rates. So I mean if you think of the the many many years when we had low and in some countries even negative interest rates there were warnings sounded all the time. There are risks to financial stability. There are risks to long term growth. It's going to stoke inflation. It's going to distort financial markets. Is dis Asset valuations And in fact you can think of zombie companies as a type of distorted asset valuation right because a company that cannot generate enough revenue to support its debt service and it's running costs arguably is trading at an inflated valuation because it can continue to borrow at low rates so
Sort
PERSON
of put it on the backs of central banks but it's it's certainly an inadvertent consequence of something that had to be done to keep growth going during the the after the financial crisis. International finance pleasure to be here.
Larry Summers
PERSON
of
Harvard
ORG
. This is Wall St Week on
Bloomberg
PERSON
. Crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. For something as universally important to human life Mysteries surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harness to further expand our understanding It's easy to memorize things that makes you smart if you can When and how and why to use that information And that's what you bring figures out while you're sleeping.
This is Walsh St. I'm
David Weston
PERSON
. We're gonna wrap up
the week
DATE
. Once again, with our special contributor,
Larry Summers
PERSON
of
Harvard
ORG
.
Larry
PERSON
, thanks so much for being back with us. So, let's start with those fed minutes that everybody was waiting for eagerly and they came The markets didn't know quite what to do with them what did you make out of those minutes They confirmed what I suspected Which was that the
fed
ORG
doesn't know where it is That the world is very ambiguous at this point And Of a meeting or a very poor way to convey
Collective Look
PERSON
the
fed
ORG
has a fundamental problem About which it is not yet willing to be realistic And that is that it is exceedingly unlikely That inflation can be brought down to target levels Without a substantial increase in unemployment they To be very concerned about unemployment and about inflation and the reality is that it's probably not so realistic to think that they're gonna get All the way down And they don't wanna acknowledge that and that forces a certain confusion Into all of their Statements I can sympathize and understand why they don't want to acknowledge that part of the problem is they've taken on an excessive obligation To communicate so I think there are a very very difficult situation I don't know to what extent they're gonna choose to take the pain that is ahead Choose to take it on the That To be seen I suspect in some ultimate sense they don't really know either which way it's going to go Gotta worry them. That Financial conditions are now Really looser than they were when the
fed
ORG
last met And Middle of a tightening cycle Conditions or substantial loosening That has to make a central bank. Nervous. David there's
one
CARDINAL
other aspect of this situation that I think is very important and under recognized What's happening with
Russia
GPE
and
Ukraine
GPE
what's happening with droughts all of it they don't really fully internalize that oil prices and wheat prices have both come down substantially at our predic Substantially in the future. Concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that when headline inflation is lower Then I inflation With respect to core inflation Median or trimmed mean Measures And so I think we've still got a substantial Inflation challenge ahead of us. One of the things that
Fed
ORG
emphasize in the minutes. Besides really being concerned about inflation expectations. On the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your take of the housing market. Some people say, we're in a housing recession.
Concerned about inflation expectations. On the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your ticket the housing market. Some people say we're in a housing recession right now. So I think you have to distinguish
Movers
NORP
from stairs or to put a differently you have to Look at you have to think about what the right way to look at rents is. Here's what's true What's true is that last year People who were signing new leases We're paying
15 or 20%
PERCENT
more than they had
a year ago
DATE
. Nothing like that Fatty into the consumer price index or the feds preferred measures a
PCA
ORG
index All the fed through Was the small fraction of people who saw their rents change And a constant rant for everybody else. What that means is that down the road like now You're seeing inflation Leases are coming up are
Substantial
GPE
increases and so we're gonna see significant housing price inflation in the measures of inflation that are used For
another 6 to 9 months
DATE
that's a different thing than what builders are responding to builders aren't responding to that builders are responding to what they think the price of houses will be
a year from now
DATE
and that come down and so A slowing in
Building
GPE
and that's what happens when interest rates go when interest rates go up in some ways it makes sense if we're gonna have a decline and economic activity It's better to have a decline in something where we've already got a huge stock of it and it's only the new flow that's being affected Van in Something that we need to consume A continuous basis Doesn't have any duration to it But I do think we're Chords Respect the housing and I'm sure there'll be differential impacts in different parts of the country as I say my best guess is that we will have a meaningful recession In
the next 2 years
DATE
and if so, I think there's considerably more pain with respect to housing ahead.
Larry
PERSON
, when you talk about softness and slong, we certainly saw that in numbers coming out of
China
GPE
at
the beginning of this week
DATE
. And I wonder what you make of the
Chinese
NORP
problems as we know there are
three
CARDINAL
But on the other hand is it possible that we'll give a little at least a little relief to the
fed
ORG
here on slowing inflation Probably well Goes back to the issue we discussed
a few minutes ago David
TIME
about oil prices and grain prices
Main
ORG
impact of
Chinese
NORP
slowing is likely to be How much weight those should be given as we think about our inflation rate And this country but it probably is a positive on inflation The larger questions How we see
China
GPE
in the future and how
China
GPE
will be responding to these Increasingly profound events in
China
GPE
It was taken
as almost axiamatic 6 months or a year ago
DATE
that at some point the
Chinese
NORP
economy would surpass the
American
NORP
economy in terms of total GDP at market exchange.
At some point the
Chinese
NORP
economy would surpass the
American
NORP
economy in terms of total GDP at market exchange rates that's now much less clear than it previously was and I think you're seeing all kinds of challenge Huge financial overhang there's the where the growth is going to come from there's the growing communist party involvement in a wider range of enterprises there's the demo Traffic I have been saying for some time that I think people are gonna look back at some of the economic forecasts about
China
GPE
in
2020
DATE
in the same way they looked back
Forecast
PERSON
for
Russia
GPE
that were made in
1960
DATE
or for
Japan
GPE
that were made in
1990
DATE
. Last one here toward
the end of the week
DATE
turkey central bank made a move to try to combat inflation by you will believe this cutting the interest rate from
14 to 13%
PERCENT
This of course is part of President
Erdogan
PERSON
's theory of interest rates President
Erdogan
PERSON
is the world's
first
ORDINAL
He is putting modern monetary theory into effect. So far it hasn't worked very well For him For the
Turkish
NORP
people I don't think that's going to turn around And I hope that the misguided accolades of modern monetary theory in
the United States
GPE
are watching. Okay Laurie thank you so very much that's
Larry Summers
PERSON
of
Harvard
ORG
are very special in trader here on Wall St week. Coming up, we all know getting older makes us slower and grayer but can it also make us richer? That's next on Wall St Week on
Bloomberg
PERSON
. No one covers the world like
Bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming
Taiwan
GPE
and
China
GPE
. To come from. The moment news breaks
24 hours
TIME
a day. Stocked early enough all these precious materials you were just mentioning and we were on the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need Finally,
one
CARDINAL
more thought. It's
one
CARDINAL
thing that we all have to do None of us wants to think about it And sometimes seems like some of the oldest among us may be the deepest in denial where there is rock musicians like Mick Still performing live on stage at
the age of 79
DATE
or sir
Paul McCartney
PERSON
who's still going strong way past that age of 64 he wants worried about or are political leaders in or nearing their
80s
DATE
like President
Biden
PERSON
and
Mitch Carnell
PERSON
and
Nancy Pelosi
PERSON
who snapped back at a reporter
10 years ago
DATE
when asked a question. College
five
CARDINAL
at least say that you're just gonna stay on
No. Hey portal McDonald. And who can forget President
Ronald Reagan
PERSON
who in
1984
DATE
provoke the age old or should I say old age question after Through his previous debate with Only come back with this zinger. I will not make age an issue of this campaign. I am not going to exploit for political purposes. My opponents, youth, and inexperience. The world of business and finance is an entirely immune from this but by
Warren Buffett
PERSON
who at
91
CARDINAL
shows no signs of stepping down and told our own
David Rubenstein
PERSON
his goal is to keep Quite like to be the oldest man that ever lived actually And who knows maybe we don't really just get older. We get better. For those who are hoping that that may just be true. We now have a concrete, provable example. Coming from the world of golf. We're adjourning tour professional who'd struggle for
years
DATE
. Suddenly became Simply by turning
50
CARDINAL
pushing him into Older player PGA tour champions league to be sure
Stephen Alka
PERSON
from
New Zealand
GPE
happened to be at the very top of his $
Three
MONEY
.
5 million
CARDINAL
which is more than he made in all the rest of his career put together and if he keeps sinking extra long putts like Did to win the
Boeing
ORG
Classic Bloomberg
PRODUCT
see you
next week
DATE
.
Ken Griffin
PERSON
is moving both sit it out and sit it all security is to
Miami
GPE
this group was broken by
Bloomberg
PERSON
's
Amanda
ORG
A lot of the satellites have proposition systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If you're satellites gonna come dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem now. The risk of Just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up
This is my kitchen table and it's also my filing system. But we're much of
the past three decades
DATE
I've been an investor The highest quality of mankind I've often thought was private equity. Hey Make it to the top. No due diligence For
the past several decades
DATE
,
Andrew Livers
PERSON
has been one of the most important figures in
American
NORP
business. For
14 years
DATE
, he served as a CEO of Dall transforming that company from a chemical manufacturing company to
one
CARDINAL
led by science and innovation Currently
Andrew Livers
PERSON
is involved in a number of business endeavors including serving as chairman of
Lucid Motors
ORG
in
EB
GPE
startup company he also serves as an adviser the
Saudi
NORP
sovereign wealth fund I sat Andrew recently and Lucid showroom in
New York
GPE
to discuss his accomplishments and his future ambitions. So I've been reviewed many business people on the show but very rarely about interviewing anybody who has any interest in so many different continents so you're doing something in
Saudi Arabia
GPE
we'll talk about that you're involved in things in
Europe
LOC
In
Australia
GPE
, your native
Australia
GPE
, you are now the head of the Olympic committee. Is that right for the next
Olympics
EVENT
in
Australia
GPE
? It's a 2032 Brisbane Olympics. They won the bid
last year
DATE
and on the president of that to put it in place and 2032 as you know is
10 years
DATE
so that's an exciting project. And
the United States
GPE
you were for quite Sometime
more than a decade
DATE
the CEO of Dow Dow chemical initially that were called down and you merge it with Dupant before you step down. Is that right? Correct? Yeah. So, let's go back to your beginning. You grow up in
Australia
GPE
. How did you manage to get to Dao and to
the United States
GPE
? Yeah the the gene that got me to have Wonderlust was because I grew up in a little multicultural town in
Northern Australia
LOC
called
Darwin
PERSON
. Lots of
Asians
NORP
, lots of indigenous people, first Nations people, lots of immigrants like
Greeks
PERSON
that came from these very poor areas. So, I I had this
Understand
PERSON
the places north of us
Indonesia
GPE
,
China
GPE
,
Asian
NORP
, and as a whole. The
American
NORP
You know, if you like knowledge that I got was listening over the radio to, you know, things like the JFK, Assassination, and Man on the
Moon
PERSON
, and you know, I we didn't have TV where I grew up. So, I was just fascinated by
America
GPE
and what it offered the world. So, that combination Got me recruited out of campus I didn't join a
British
NORP
company I didn't join the
Australian
NORP
company the companies that came by that were
American
NORP
were the ones that I was intrigued by and now had the best recruiting line of them all for
21 year old
DATE
join us and we'll show you the world so that combination where What I was exposed to and the Dow recruiting line. Family a wealthy family Blue colors we would call them immigrants my father we lost our grandparents he he lost his parents and so he raised his
two
CARDINAL
younger brothers when he was
12
DATE
he became an apprentice and a carpenter and he and his
two
CARDINAL
brothers A small fledging building business in
Darwin
PERSON
and we I was the
first
ORDINAL
to go to university in my family. Do you graduate from university and go to work a dowel and in
Hong Kong
GPE
initially? Would they send me down to a very cold part of
Australia
GPE
called
Melbourne
GPE
which haven't had a lot of great people. I got cold redefined when I went to But I thought it was cold at the time. They went I went there for
6 months
DATE
and there was an accident in a factory in
Hong Kong
GPE
. And they sent
four
CARDINAL
Australian
NORP
engineers. I was one of them to go work to actually help the locals adjust to operating a complex chemical environment. So now is very famous chemical company was for quite some time. And how do you go from
Hong Kong
GPE
Australian
NORP
accent to an
American
NORP
company in the middle of the
Very famous chemical company was required sometime How do you go from
Hong Kong
GPE
Australian
NORP
accent to an
American
NORP
company in the middle of
the United States
GPE
. The visionaries that ran down
the 60s
DATE
that led to my recruitment in
the 70s
DATE
. Had this view that to go international yet to high local. Well before it was Vogue and they went around the world looking for people who were willing to go to these far-flung
Hong Kong
GPE
at that time wasn't the sophisticated city that it is today Basically, you know, what they did was they localized and grew talent locally but kept a playbook. So, I was spotted early by the then dial leaders and they started to move me around to test me in different places. Mostly in
Asia
LOC
and then Eventually to the
US
GPE
. Engineer, what was your skill set? Chemical engineering which you know, when I look at
today
DATE
's world and I think about chemical engineering, the word chemical sort of sort of puts you into a different place with a thought. It's really problem solving engineering. And
Learn
PERSON
how to be a problem solver by learning chemical engineering. So, you've eventually moved to Dal headquarters where is it's in
Michigan
GPE
, right? But what what small city is it? Little town called
Midland
GPE
with a founder, founder of the company, and we're still headquartered there. Alright, so you move there and and for how many years were you the CEO? So, just shy a
15
CARDINAL
of The last couple were in the merged entity which my successor then we've set up the demojo and we can talk about that if you like but certainly
the 15 years
DATE
included
the last two
DATE
as executive chairman of the Dow Dupont entity but I let us into the merger And the restaurant are behind that. Was a
10 year
DATE
remake. We put a strategy in place in
oh five
DATE
. And we execute it over
10 years
DATE
to move us back to an innovation centric company. We had lost our way. We had commoditized. We had restaurant on the walls all over our previous inventions. And by the time the 90s and the ohs came around we were really out our innovation Chest was bare. Our cupboard was bare. So we reconstitute on innovation in the company by changing the portfolio. So you took down chemical. You renamed it down at
one
CARDINAL
point. Took the chemical out of it. And then you merged it with dupont. Yeah. And then you split the company in the
three
CARDINAL
different Funny. Is that right? Yeah, so
two
CARDINAL
amazing
American
NORP
iconic companies,
300
CARDINAL
so, so years of corporate history between them.
Dupont
ORG
found it on explosives,
Dow
ORG
found it on, you know, chlorine. You think about the corporate history in both of those, the portfolios they both had assembled by the We hit
this century
DATE
were across a range of different applications and there were many things to many markets. So, what the premise of the case was working with their brain on the dump side? Was we put the
two
CARDINAL
together and separate them into more pure please? So, Dao, materials, the
ag
ORG
company, agricultur Products and of course the
Dupont
ORG
company the new
DuPont
ORG
company on specialty chemicals and plastics CEO number of
years ago
DATE
did your wife say when you're done being the CEO is the time you spend more time with me and stay at home and now you're running around the world so was she disappointed or she happy to have you out of the house still She expect me to No. I should knew me but the story on the
Olympics
EVENT
is a classic. That call came, I don't know,
2 months ago
DATE
, on a
Saturday
DATE
, we're in
Sydney
GPE
. Now, living room. I got a call from the Premier of
the State of Queensland
ORG
saying, would like to offer you the presidency of the
Olympics
EVENT
. I said, Excuse me. And and you know, I was aware of Brisbane at one. So, I didn't embarrass myself. But I said, can I get back to you? Can you tell me a little more, get, and I'll get back to you. Yeah, but we wanna announce it on
Monday
DATE
. So, Stop. Okay. So, anyway, my wife said, who's that? And I told her and she. And she said, look to me in the face. She said, you've got to take it. And I said, you know how busy I am, right? And she said, I know how busy you are but you've gotta take it cuz you're the right person to get it done And if it means you're gonna drop some things, drop some things, but take it. That's the type of partner I have.
There's more activity in the fusion world than ever and not just in government research labs. There's also an emerging private fusion industry that's attracted
billions of dollars
MONEY
in capital in
recent years
DATE
. Governments and private investors alike realize that we've got to find a solution that's gonna allow us to get to net oh targets. This is one of the hardest but most rewarding problems that that humanity could work on. Ultimately, we all want the same thing. We want someone to put electricity on the grid from a fusion power station as quickly as possible Frankly the scale of the challenge
3000
CARDINAL
gigawatts a fossil fuel to replace there's not many things they can do that in fact there may only be fusion that can really do that. And while many in the scientific community predict fusion power will take
decades
DATE
some in the private fusion space believe we'll get there
Just a few years
DATE
as soon as the
2030
DATE
's How did you wind up to be the chairman of all of a bill company when you hadn't really been in that industry? I think the manufacturing thermatic that I had throughout my whole career wrote a book on it making it
America
GPE
Made me an attractive candidate to a whole host of different companies around the world whether it be bored or advisory certainly the lucid experience was something I didn't predict but it came really through my association with the kingdom of
Saudi Arabia
GPE
who were the major investor in The precise little Lucid. I got asked by the
PAF
ORG
to come in and help
Rebuild
PERSON
the company and create what you see here which is a full-fledged EB company.
First
ORDINAL
Greenfield
PERSON
site
EV
ORG
's tester did a modified site, right? So, we build a
Greenfield
PERSON
site and it's up and running right now. So, manufacturing was a big piece of my expertise that was attractive to joining the Lucid experience So
Saudi
NORP
Aramco is now the most valuable company in the world. Is that right? Yes. And you're involved in is that you're on the board of it. Yes. And you see energy prices or oil prices coming down anytime in the near future? Do you think they're gonna be
over $100
MONEY
per hour for quite some time? Look commodity markets as Must know well known your story career David impossible to give you an answer other than you know the most important dynamic of the mall is climate change and see a tour emissions and how can we make And gas for that matter cold before but I think
Cole
PRODUCT
is destined to be faced out but all in gas and our addiction to it and the transition that is needed to get
COtwo
ORG
out of the air. We'll eventually dampen demand EVs which I'm sure we'll talk about soon. Evies alone, electrification of the
Transportation
ORG
market. We'll see a dampening of demand but it's impossible to predict in a short term. How do you predict a war
Ukraine
GPE
and the effect that it had on commodity prices. So, we do, we will go through periods of zigzag line if you like a pricing. For
some years
DATE
to come. And I can't tell you whether it's gonna be high or low, no one can. But
Saddy Arabia
GPE
which has a normal amount of oil, seems to be interested Finding ways to do things that are not related to oil and electric vehicles is one of them I guess that's right. Yeah, did this vacation division
2030
DATE
that was put in place and you'll you'll quite familia By his highness crown prince has has a big piece of it to diversify away from oil and to go into other businesses and other activities that might be related so chemicals and plastics and downstream creating a circular carbon economy hydrogen and going to the green economy
Renewal
PERSON
was his gentle wind. Nuclear power. This diversification on the energy mix is a big part of the vision 2030 plan. And that's what
Arenko
LOC
and others in the kinderma driving. Let's talk about Lucid for Mum. You're the chairman of Lucid. Yes. And it's an electric vehicle Ready? Tell me
Plan and that's what Aramco and others in the kingdom are driving. Let's talk about Lucid for mama. You're the chairman of Lucid. Yes. And it's an electric vehicle company. Tesla seems to be so far ahead of everybody else. How do you compete with
Tessa
PERSON
when they have such a large share of that market? This is a technology business. So, in your earlier question about how did I get involved? I said manufacturing. Well, a manufacturing is an interesting word being useful
a couple 100 years
DATE
in humanity as we obviously went up the technology ladder. Humans are inventive and innovative because of technology advantages. Lucid offers a technology
Advantage
PRODUCT
and beats everyone right now and has been recognized for it.
Firstly
ORDINAL
, is the distance we can travel without needing, you know, to charge and that's over
500
CARDINAL
mi
EPA
ORG
certified.
Second
ORDINAL
is our charging time. We can actually get a recharge of
up to 300
CARDINAL
mi in
22 minutes
TIME
. That's technology. Those
two
CARDINAL
topics are all Technology the car and it's Is aesthetically beautiful I've fantastically it's absolutely totally a luxury car and clearly an experience and a software that supports it is also technology so what we've been doing at Lucid is homing in on the technology side of differentiation is there room for a Tesla or a loosen and a bunch of others of course I mean we are going to see
EV
ORG
's as the primary motor transportation in our lifetime. Now where is Lucid manufacturer's cars?
Casagranda
ORG
,
Arizona
GPE
. Just outside of
Phoenix
GPE
. If I wanted to go buy one, where do I go buy one? Buy them online or you come to showroom like this and they cost
about $5000
MONEY
a piece or something like that. You are in the right place to buy one. We can maybe hopefully sell what you want as you leave. The we have a retail strategy. We go directly retail and service centers around the We're opening up retail centers as we speak in in
Europe
LOC
but we have them in
the United States
GPE
and this is an example of
one
CARDINAL
and the price point is not $
5000
MONEY
. We have a price point at the high-end lux Our competition is
Porsche
ORG
BMW
ORG
out here trying to be an electric vehicle for high end start at this point in time that's our strategy we've got the dream the Grand Touring we've got the the air and then the SUV the gravity these price points are north of
$100 thousand
MONEY
with the the dream at
161
CARDINAL
70 1000. But clearly that's a luxury and the mass market end where gentle motors and forward and others are in a pointing themselves is obviously the big opportunity. We'll eventually get there but we've made no announcements. And you have one of these cars I do. I was an early buyer at full price. I felt it was important. I demonstrate my support for the team. I'll never forget the the amazing drive I had in. It's I have it down in
Florida
GPE
where where my residences I drove it drove to
Palm Beach
GPE
and drove around there and every time I stopped I had people looking at me And I knew it wasn't me. It was clearly the car. And then I parked it. And I will kid you not. It was like a mob scene around me. It was one of the I think it was the
second
ORDINAL
car in
Florida
GPE
. So clearly had not been seen. I valet parked it at this hotel where I was having dinner. And and the the gentleman wanted to compete with the other gentle
Valet
ORG
park that can I drive a car drive a message you know Maybe I should park it myself and so it's it's it's an attractive car and it really drives supremely well. Let's talk about the roads on which these cars drive. So, you've been advised with the President's
United States
GPE
on infrastructure and manufacturing but on infrastructure, you've been involved with the legislation that was passed not long ago.
The United States
GPE
infrastructure so terrible compared to so many other a wealthy countries. You know I have been around
US
GPE
politics like you for
a couple of decades
DATE
and have served a variety of presidents from the different parties and and the attitude in
the United States
GPE
is obviously to keep taxes low and keep the public spend under control and the word control is interesting but that Forward thinking in terms of planning and therefore a short termism around our fiscal policies has hurt us I mean in essence you infrastructure is a long term And and to get a long term return putting it into private hands is
one
CARDINAL
way
Some around our fiscal policies has hurt us. I mean in essence you infrastructure is a long term return. And and to get a long term return putting it into private hands is one way of doing it. But really the public side of life has to be willing to brew the forward spend. The forward spend on airports and roads and
EV Charging
ORG
stations has to come from the public domain. Now, raising taxes To spend money on infrastructure You've gotta trust the people doing the spending. And I think the public private model is the way to go there. Which is actually create an infrastructure bank. That there's
US
GPE
public company owned or public sector owned that has private sector matching funds. I think that sort of breakthrough has yet to occur in
the United States
GPE
. So where we go Text and spend which unfortunately one side of the old disagrees with. Manufacturing is something
United States
GPE
has thought by many people not to be as good at as we were or do you
50 years ago
DATE
is that's fair there's a perception That manufacturing is
yesterday
DATE
's sector and that is so erroneous because pretty much everything While
Tesla
ORG
's in the lake make for good headlines the reality is that even if every car on the roads
today
DATE
when electric it wouldn't be enough to curb global emissions to avoid catastrophic climate change. Greenhouse gas emissions from transportation account for
about 29%
PERCENT
of total
US
GPE
greenhouse gas emissions. So what about the other
71%
PERCENT
? Instead of burning oil and gas to give us the energy and electricity we need we wanna do
100%
PERCENT
clean energy Vehicle is all electric with no fossil fuels. We wanna do that with our buildings and if we can do it in
one
CARDINAL
building, we can do it in all buildings and if we do it All buildings will reduce
30%
PERCENT
of
US
GPE
greenhouse gas emission.
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. But they also want low and stable inflation. We have to give them both. Now your
first
ORDINAL
book was about manufacturing Manufacturing is something
United States
GPE
has thought by many people not to be as good at as we were 40,
50 years ago
DATE
. Is that fair or not that that's a perception at least. Yes, that's fair. And I addressed it in the book because we think smokestacks and we think of rivers on fire when we use the word branding is everything and today everything is branded in a heartbeat Through Instagram and you name it and as a result of that there's a perception that matter factoring is
yesterday
DATE
's sector and that is so erroneous because pretty much everything in modern life is made I used to say a dow. We've only got
three
CARDINAL
functions. Okay? To invent, to make, and to sell. The rest is overhead. And the make part Actually very connected to the invent part
China
GPE
was brilliant in its strategy through
the 30 years
DATE
of
Denzel Ping
PERSON
It attracted assembly And then insisted On R and D there were only 10 R and D labs foreign owned in
China
GPE
in
1990 2010
DATE
there were 40 1000 R and D lapse. Why? Because they wanted to know.
R and D labs far known in
China
GPE
in
1990
DATE
by
2010
DATE
there were
40 1000
CARDINAL
for an R and D labs Because they wanted to know not just how to make an assemble. They wanted to invent all the way back to the material to the actual the battery, to the products, and to do that, they needed R and
D.
NORP
Manufacturing RND lived together Okay they live together through prototyping and scaling And the topics of invention and innovation are in manufacturing cuz you actually learn what you make and then when you digitize you learn more digitize the manufacturing
Massive
NORP
innovation opportunity And frankly one of those things that
the United States
GPE
is phenomenal at Is we know how to innovate and be an entrepreneurs and how to scale but if we've lost our billy to actually make then we start to actrophy the innovation side Inventional wisdom is that
United States
GPE
can't manufacture things at costs that are attractive to markets so that's why we've outsourced it. You think that's unfair? It was fair during what I call the loss of industries such as textiles and foot Clothing which were very labor intensive. It's completely not the case with things that make the
iPhone
ORG
, okay? And all the circuitry and semiconductors and high-end technology
Pots EV's
PRODUCT
this is where
the United States
GPE
is actually the best at and it's not labor cost driven so offshoring and outsourcing and and moving things for labor costs fine they went to countries that have lower labor costs The Bangladesh is on the
Vietnams
PERSON
but the high end manufacturing, the quality manufacturing, for
2 days
DATE
and
tomorrow
DATE
's technology innovations. We should be the epicenter of that right here in this country Because the labor cost is actually not the relevant cost The relevant cost is actually the raw material the supply chain and we have the market This is one of the few countries in the world that can say on
one
CARDINAL
country I have a massive market The way I'm in love people and natural resources that's manufacturing Now you were an immigrant to
the United States
GPE
and your grandparents were immigrants to
Australia Immigrants
ORG
has often said have like capacity to work very hard to prove themselves and move up the ladder so do you feel you have an immigrant mindset that is pushed you to do all these things I think my story as growing up in an immigrant family where
English
LANGUAGE
wasn't the
first
ORDINAL
language at home it was
Greek
NORP
and speak
Greek
NORP
man do I do yeah and use for a lot I guess when you're talking the Olympic committees Never thought of that but yes it's probably useful for that. I think the immigrants backstory I have really drove me to work hard. But also Make a difference and a very
American
NORP
trade what attracted me to
America
GPE
This very day and don't embarrass you. You're a great example of it. Is the amazing giving back that occurs in this country? And not enough of us know a lot about it. It gets a bit a few headlines. So I mentioned the tax and spend thing as being a detriment to building modern infrastructure but On the other side Are charitable and give and care about making a difference in their community that's what Dow showed me and that's what I and my wife
Paul
PERSON
and I live today that
American
NORP
Hey Or an immigrant? For the next immigrants I can make we can make their life better so for somebody who's watching this and wants to be a successful global business leader what are the skill sets is it hard work learning how to read well keep continuously reading learn how to a good speaker what are the skill sets you think somebody really needs One of the things that I would add to that list I agree with all of that that I would do and I still do to this very day is I would prepare Well before I got the job or was given the nod I would know as much about what I was about to be offered or to do Before I actually did it I would read I would talk well before
the days
DATE
of the
iPhone
ORG
I would go to the library I remember my father knocking on the door was the sucker appearanica salesman remember those books there were
12
CARDINAL
of them right and I would begged him to to buy them and he said only
Trying to win a basketball championship. Then when you're trying to please investors where's the greater pressure I think it's definitely trying to win a championship. It's hard because a lot of like when you invest and you know this, when you're investing You can control a lot more things It on a basketball court you can't control whether somebody's gonna make a shot you've gotta get lucky and what's the greater pleasure making
five
CARDINAL
times your money on a distressed debt investment or winning the
NBA
ORG
championship They're both fabulous I I wish I could do
one
CARDINAL
each year that would be great but I I think there's a great feeling in being right on an investment that Which I think is great. Winning a championship It's a very surreal feeling because there's a whole city or state that is actually behind you You know, we had
70 1000
CARDINAL
people at the finals and we had them all outside. It's
17 1000
CARDINAL
in stands. And then literally like
60 1000
CARDINAL
people outside And when we won like just the joy that you had brought to the city was phenomenal. Watch
Bloomberg
PERSON
surveillance early edition for the news you need when you need it. In
new york
GPE
and
Anna Edwards
PERSON
in
London
GPE
.
Australia Central Bank
ORG
. Then surveillance for in-depth analysis. And
Lisa Brown
PERSON
with some
Jonathan Farrow
PERSON
the RPA front and center. How does
Japan
GPE
get away with not raising rates? Can it sustain? It's normal at a time when everybody else is facing a very different reality. Be prepared be ahead of the game. Access the financial world on demand Here from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
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Sustainability
ORG
, security, and hunger. In this episode of
Bloomberg Green
PERSON
, we're focusing on food and how we can produce its carbon footprint and get it to the people who need it. We'll explore the near shoring of food production. We are locating our farms close to the cities that we are actually serving. The consequences of a lack of food for the poorest in society. Right now, at this very moment, we do not have a food availability issue in the world. We are grappling with a food accessibility and a price-related issue. And solutions for the planet like vertical farming. Mitigate risk and overcome those make a changes we need to diversify and we need to find alternative ways to too farming From
Bloomberg
PERSON
's world headquarters in
New York
GPE
I'm
Kaylee Lyons
PERSON
and this is
Bloomberg Green
PERSON
. According to
the United Nations
ORG
around the
10th
ORDINAL
of the world goes hungry that's about One
1 million
CARDINAL
people and the number is rising up about
six%
ORG
last year
DATE
.
Africa
LOC
With
more than 20%
PERCENT
of the population facing hunger. The coronavirus pandemic and the war in
Ukraine
GPE
are exacerbating the issues and putting at risk of goal to solve the problem by
the end of the decade
DATE
. Another key risk for many poor countries is
Exacerbating the issues and putting at risk of goal to solve the problem by
the end of the decade
DATE
. Another key risk for many poor countries is extreme heat and what that does to crops. In
last week's
DATE
episode, we covered what extreme weather can do to the world and people and in this episode, we're going to focus on food, farming, and solutions to solve the Availability. And then explore some solutions for producing food near where people live including vertical farming But first let's explore the impact of near shoring food production. President
Joe Biden
PERSON
has signed a sweeping new tax in climate plan into law
the White House
ORG
describes it as a largest ever single investment to address climate change. Hey offers further proof at
the Soul America's
ORG
Vibrant Future of America
ORG
is bright and the promise of
America
GPE
is real and just beginning. Will mean investment in new companies joining the fight against global warming summit the forefront are those involved in near shoring food production but what does that actually mean? Well, it's the opposite of globalization. Instead of taking advantage of cheaper labor and prices another countries nearshore and produces goods near where they're consumed. When it comes to dinner, food eaten in the
US
GPE
, travels
between 1525 100
DATE
mi from farm to plate. Is that a bad thing? Well, it is if we care about food security or emissions.
The last 10 years
DATE
saw more emissions than ever
more than a third
CARDINAL
came from food production and food transportation is worse than we thought a recent study found that it produces
up to seven and a half
DATE
times more greenhouse gases than previously estimated. Food miles are likely responsible for about
six%
NORP
of the world's emissions that's
three 1 billion tons
QUANTITY
of
COtwo
ORG
equivalent every year. Emissions aren't equal The
12
CARDINAL
. Five% of the world's population in richer countries account for
46%
PERCENT
of the emissions from food miles
More than a third
CARDINAL
of those emissions are generated by the international trade of fruit and vegetables the highest for any group. The emissions from transporting fruit and veggies nearly double what's produced in growing them. Stick into your
five a day
DATE
maybe healthy for you but if it comes from
thousands of miles
QUANTITY
away the impact on the planet can be huge take a head of lettuce Grown in
California
GPE
and shipped across the country to
Washington DC
GPE
that uses up
about 36
CARDINAL
times as much energy for transportation as it actually provides to the person who eats it and the problem is only likely to get worse. Food production is helping On the planet and that warmer planet isn't turn affecting food production Scorching weather and drought are decimating farm mules from Waterloo to
Wichita
GPE
from Bangalore to Bordeaux. Food security also takes a hit as it becomes harder to produce and distribute spontaneously when supplies get disrupted i say have been by the war in
Ukraine
GPE
or lockdowns in
China
GPE
. And climate disruptions are expected to get more buried and extreme. Report even suggest that increase temperatures are changing way through taste and making some varieties of fish and vegetables harder to find. What if we could have a positive feedback loop instead? Goal with near shore. Goods are closer to the consumer, instantly cutting out most transport issues, a meeting less and producing less waste. Locally grow food doesn't just travel us It's also more likely to come from small family farms which are run sustainably. They use less water and fewer harmful chemicals. So far
this millennium
DATE
we've been encouraged to become herbivores Or perhaps this time the focus shifted to making us look a voice. People who eat food produce locally within
100
CARDINAL
mi of our homes. Coming up food insecurity how bad could it get we'll take a look at the potential consequences and at Efforts to patch this problem. Bits is never green. So what's the best investment advice you've ever been given by anybody? Pound interest. The compounding of returns is an incredible mirror.
Unpound interest the compounding of returns is an incredible miracle of business finance and human existence Everything you learn is additive everyday and if you keep at it and don't quit It's an incredible miracle and it's and it's not just interest it was it was always said about compound interest returns Compound business returns compound human returns They're all very adventive. Could you learn everyday? And if you keep at it, it's very very In your observation of investors what do you think is the biggest mistake that average investors make selling it the wrong time and they sell when the prices go down yes or yes not keeping look people have conviction Are the ambassador if they invest for the right reasons that just keep at it. Big tech reports earning.
Bloomberg
PERSON
brings you the headlines
first
ORDINAL
. It really is a story of strength plus expert analysis to keep you informed. Fact that they are not profitable is concerning. This is a company that indicates maybe a recession is coming. Bounce back coming in
next year
DATE
. Earnings like
Bloomberg
PERSON
. Business authority. Technology with
Emily Chan
PERSON
. Welcome back to
Bloomberg Green
PERSON
. I'm
Kaylee Lines
PERSON
from
Bloomberg
ORG
's World headquarters in
New York
GPE
. After an era of abundance fears abound that the world is entering into a fresh era of scarcity everything from climate change to pandemic disruptions to supply chains to war in
Ukraine
GPE
and de globalization have impacted food security globally Deputy director general of
the food and agriculture organization of
ORG
the United Nations
ORG
. Beth
First
ORDINAL
just talk about the issues facing our global food supply and where climate ranks in that how great a threat is it? Yeah so you are are right on message and the fact that we are very much dealing
today
DATE
with a climate crisis
Agriculture
ORG
and food production is right at the center of and this comes as we all know setting right on top of the COVID-19 pandemic now we also have the war in
Ukraine
GPE
which is disrupting markets creating other challenges for farmers all over World in terms of supply availability of both commodities and fertilizers and other important inputs. So, when we think about the importance of needing to address climate driven challenges and thinking about the future of how agriculture can become more sustainable, this is the moment I think before us to really make sure we we commit to that Well as you say this is a problem all around the world but what region Are at the greatest risk. Yeah so when we really focus on climate I think we have to be honest that really it's every part of the world that is seeing climate driven impacts we we see those in
the United States
GPE
we see them in
Europe
LOC
whether it's it's increased temperatures new floods that are emerging continue drough
Rivers
ORG
are drying up but when we look at the places on this planet where people are food insecure they're hungry they're being driven to really high rates of of starvation and and even malnutrition when we really think about those places and also have conflicts that have emerged we really Need to focus our attention on the continent of
Africa
LOC
, on the global south,
Latin America
LOC
,
Central America
LOC
, the dry corridors we call it, and other parts of of
Asia
LOC
as well. The climate crisis is here in every part of the world We need some kind of call to action if we're going to solve that problem or at least mitigate it, right? So, what
Tangible
GPE
. The way we eat what we're eating.
At least mitigate it, right? So, what Tangible that can be done to protect the global food supply or at least adapt the way we think about food the way we eat what we're eating in order to be able to deal with that changing climate Yeah, so this is where for agriculture especially, I think this is the moment where all of us need to do agriculture as part of the solution as opposed to being a part of a problem. And this is where a real commitment to Agricultural production which means doing more feeding more people but doing it with fewer resources, fewer inputs, and with less of an impact on the planet. So, doing more with less and this is where I think in this very moment, the opportunity for science, for innovation, for
Productivity
ORG
changes to all of agriculture is most important. And finally Sectors of the economy in
the last year
DATE
we understand that constraint supply leads to higher prices how much when we think about food shortages is just that actual shortage not having enough to feed people and how much of it is that what is available is more expensive There for affordability becomes a problem and access is an issue Right now, at this very moment, we do not have a food availability issue in the world. We are grappling with a food accessibility and a price related issue but Moved out of the
black sea
LOC
region. We are seeing record prices start to ease a bit. We are having good crop production forecast in number of the important regions of the world and so the very I think important message for all of us is Really make sure that we keep markets open that we don't find ourselves in a position where countries are imposing unnecessary trade restrictions or other kinds of fans on on market openings this will be another really important I think aspect of navigating
these next several months
DATE
. Deputy director general of
the food and agriculture organization of
ORG
the
United Nations
ORG
thank you so much. And coming up, we've seen the problem. We've looked at the consequences. So, what solutions are out there? We'll take a look at some innovative methods which are prime to change how we produce food and how far away we produce it. That's up next This is Bloomberg Green Okay so you're moving in on me quick I'm Deal with your night cuz it's really bothering me. Oh Yeah. Up to
this weekend
DATE
. Lot of chess. For for you. I know you're pretty good Oh I don't like that I will take this Put it over here. Not cool. Cool. Alright. I will, I will concede. I can see Very good game. Well played. Thank you sir.
Bloomberg
PERSON
crypto
Tuesdays
DATE
Crypto
Tuesdays
DATE
. Welcome back to
Bloomberg Green
PERSON
I'm
Kaylee Glines
PERSON
from
Bloomberg
PERSON
's World Headquarters in
New York Raining
GPE
agriculture remains
one
CARDINAL
of the biggest challenges in the fight against climate change with food systems responsible for
as much as 30%
PERCENT
of global greenhouse gas emissions as well as contributing to a loss of biodiversity. At the same time, extreme weather events linked to rising temperatures undermine farming and seafood production creating a vicious cycle. What solution may be swapping breath for height and farming into the sky. Vertical farming methods may be able to deliver high Produce to local consumers with less waste and without concerns over fickle weather. We sometimes like name I wanna only know but they wanna be part of the action. What is been important about indoor farming is that this opportunity to really understand the possibilities that we have in
the years
DATE
to come. Warehouse scale indoor farms. Completely independent of weather in seasonality. While we're really doing is not just reinventing farming we're actually reinventing the entire supply chain we're locating our farms close to the cities that we are actually serving
Weeks
DATE
or
months
DATE
of time nutritional agricultural system.
Jose Andres
PERSON
has been an investor and an adviser and a friend of
Valerie
PERSON
for quite some time. Because the pandemic And this is the situation inside
Korean
NORP
right now. Simple thing of producing food. Hey bro completely pesticide free so there's no herbicide no fungicides no insecticides for over 100 times more productive than a square foot of traditional farmlands and we use only a tiny fraction of water compared to traditional agriculture What makes that all possible is a combination of robotics and automation that we design and develop on our own as well as the baller operating system. Attributes around our crops and to adjust variables in real time and that kind of control allows you to drive flavors and attributes of props that we've never even experienced yet before. A power we focused on leafy greens and herbs as a start and we have the technology we have the retail partnership we have the know how to begin to move into new crops. Incredible representation of what we can do in our area. It's a fruit that's extraordinarily seasonal.
One
CARDINAL
of the most pesticide ridden fruits. These aren't issues that we face. So we can focus on variety and flavor and texture There's
Mel
PERSON
is unbelievable. It's a great strawberry. Hey Facebook Of course be in my restaurants totally. Being the right technology the smart technology to be able to
Faster
PERSON
, quicker, better, smarter, less use of water. Dance props.
Even more calorie dance props. If
Valerie
PERSON
we've been growing
hundreds and hundreds
CARDINAL
of variety of crops we're thinking about agriculture for the generations to come given the climate crisis that we're dealing with
today
DATE
. More chances we have to solve any of the food issues we face Not all of us have the luxury to go to a farmer's market. We can bring that high quality, local, fresh produce to consumers everywhere in all types of retailers as well. So, what you see here is very much the future in more ways than one. For more let's bring in
Erez Galonska
PERSON
the CEO of
one
CARDINAL
of
Europe
LOC
's largest vertical farming facilities in farm. Great to speak with your rest. So let's just talk about vertical farming as a whole and what problem it is you're trying to solve.
First
ORDINAL
of all we are at in farm Being a global farming network powered by
AI
GPE
to provide premium produce if you like in affordable prices our vision is to help cities become more self-sufficient in their food production and I can tell you that at in farm we escape ourselves one of the biggest questions And trying to overcome one of the biggest challenge humanity faces. How to feed clothes to
10 1 billion
MONEY
people by
2050
DATE
. We know that we have
three
CARDINAL
main
Threats
NORP
, very big ones that the world is facing
today
DATE
, climate change, And of course wars and this shocks represent major wake up call to the fragility of our food systems and the need to make the most resilient and more reliable to feed people at scale and this is exactly what we are doing in fun So obviously there is a major challenge that you are trying to help address but that doesn't mean that you don't face challenges yourself what do you think the biggest issue is
Vertical
ORG
farming as it attempts to scale and meet the world's needs. I would echo again the biggest ones is execution and with the climate change in the pandemic supply chain instruction ehm logistical eh going up inflation ehm Other very big problems that eh
Today
DATE
. We know that this shocks install time and we are very much focusing on execution, delivery of products to our consumers and to our clients and I can tell you that we already signed
hundreds of millions
CARDINAL
of contracts with leading retailers globally. So, it's really it's about execution and delivery on time and it's Me challenging during during this tuberlint And times. Well, clearly in farmers growing very quickly, what scale do you think you'll able be able to reach eventually? By
2030
DATE
. We tend to have growing centers in
20
CARDINAL
countries with
millions
CARDINAL
of growing Square meter Active in the field growing the entire foot in there, vegetable basket, I can say Supply chain destruction and the ongoing war in
Ukraine
GPE
. We continue to execute. We just tell launch a new facilities in
2022
DATE
. Increasing our footprint by
20 1000 square meter
QUANTITY
which is
40%
PERCENT
up then half one of
last year
DATE
. And just widening the lens beyond in farm when we think about vertical farming as a whole What role do you see it playing eventually in the agricultural mix is this going to supplant traditional agriculture
1 day
DATE
in the future? To mitigate risk and overcome those negative challenges we need to diversify and we need to find alternative ways to to farming and of course vertical farming control environment that we portraits one of those solution if you look on the total addressable market the food and vegetable market we are talking about
Three 1 trillion
QUANTITY
soon to become
six 1 trillion
QUANTITY
food and vegetable market and a vertical farming market share from this is going to be in around 30 1 billion by
2030
DATE
and I can say that
And the vertical farming market share from this is going to be in around 30 1 billion by
2030
DATE
and I can say that this trend will continue as food and food security become even more important in times of crisis. Alright, on that note, we will leave it as CEO of In Farm thank you so much. Okay, so we've looked at how we might form better on land but how about our oceans? Sustain Fish farmers say we're in salmon far away from their wild cousins solves the problem of waste parasites and disease so let's take a look at how Blue farms in a close loop ecosystem to minimize their environmental impact. Any salmon that's produced on land is better than a salmon that's producing an open net pen. The attitudes are changing per capita consumption is increasing of seafood and aquaculture needs to respond. My name is
Kirk Havercroft
PERSON
and I'm CEO for
Sustainable Blue
ORG
which is a land based salmon farm situated on
the Bay of Fundi Currently
LOC
in
North America
LOC
we consume somewhere in the region of
half
CARDINAL
a
one 1 million metric tons
QUANTITY
of
Atlantic
LOC
salmon
every year
DATE
but
only about 140 1000 metric tons
CARDINAL
of that is actually produced in
North America
LOC
and the reason for that is that salmon farming in the ocean can only take place At certain latitudes because salmon need are fixed ranging water temperature within which they can survive. There's what we call open the forms of aquaculture and this is where we see cages or pens that are suspended in the open ocean. If there are any diseases or anything like that. There's no way of protecting your fish from that. And that's a critical piece of the problem that we're trying to solve. So
Rasfami
GPE
has a tremendous opportunity to fill that domestic production gap of the acronym rust stands for recirculating aquaculture system the water circulates between the fish tank and the filtration system which keeps that water clean and returns Back to the fish and that keeps the fish healthy and protect the fish from whatever those threats might be out in the ocean In traditional
Rass Farms
ORG
as the fish are feeding and producing that waste. The waste is filtered out and then finally discharged back to the ocean. And that was a particular component that we wanted to resolve. Sustainable blue has developed its own filtration system which is not discharge any waste back to the ocean at all. Advantage that that gives us is we can detach fully from being located by the ocean and produce fish where the fish are consumed rather than producing fish where the farm has to be located. We actually have both fresh water facilities and salt water facilities here. We have to do that because such that their biology needs fresh water at the start in salt water at the end. So we're not about to change that. We have to replicate what happens in the wild. Whilst I think what we all felt was a small business when we started over
the past 10 years
DATE
what we've seen is the almost infinite potential That this kind of technology brings. It has given sustainable blue the position of being to the best of our knowledge at least the only oh discharge salt water aquaculture facility anywhere else in the world. So from the problems the food scarcity supply chains and environmental concerns to solutions like vertical farm
This week
DATE
we've explored the impact of agriculture on society and the environment. That'll wrap it up for this edition of
Bloomberg Green
PERSON
but you can keep the conversation going by following us on
YouTube
ORG
,
Instagram
ORG
, and
Twitter
PRODUCT
. From
Bloomberg
PERSON
's world headquarters in
New York
GPE
. Is blueberry green.
Headquarters in
New York
GPE
. What are the moon shots at amazon that are capturing most of your time and attention? Well, you know, we have a unique way that we go get Big new investments and I'm not sure it's right or wrong. It just happens to be our way and we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask if it's successful, can it be big and move the needle in
Amazon
ORG
? Is it being well served
today
DATE
? Do we have a differentiated approach Do we have carpets there? If not, can we acquire quickly? If we like the answer to those questions, we'll go pursue it with a single thread team that isn't distracted by the rest of the business. When it comes to the stock, it has fallen significantly. Do you think investors are miss
Something
PERSON
or has tech just been overvalued? I have never tried to predict what stocks may do and anytime I've tried to a little bit, I've been wrong. I do really believe that in the short term, the stock market tends to be evoting machine in the long-term intense to be weighing machine. We have a concept we talked about a lot at
Amazon
ORG
. Imports and outputs you know in the ultimate output for a company a share price you know and then other big outputs of free cash flow or profit or revenue you can't really manage the outputs you have to manage at the input level and that's where we spend all our time and so if you do the right things for the business long term things tend to I think we've had very good returns for investors and I expect that to be true again. When
US
GPE
inflation numbers are released Terminal speed.
Bloomberg Bloomberg
PERSON
. The iconic
American
NORP
car company
GM
ORG
is in the midst of a dramatic transformation. We really feel general motors is moved from being an automaker to really a platform innovator. Production of all gas powered cars and trucks by
2035
DATE
. With
EV
ORG
penetration still in single digits it's a bold bet on the future of mobility. Shift to electrification and ultimately autonomous vehicles is The most transformative Thing that's happened in the auto industry maybe since
Henry Ford's
PERSON
assembly line. It's monumental. We've got an industry that's it's really stayed about the same for
about 50 years
DATE
the thing that's different now is that a confluence of what we call connected shared and electric That are really new things in a quantum way to the industry Vehicles by
the year 2025
DATE
that's where
CFO
ORG
Paul Jacobson
PERSON
comes in With finances really being
two
CARDINAL
fold
number one
CARDINAL
is making sure that we're supplying the information on how we think those decisions and that transformation are gonna project out financially and then number
two
CARDINAL
is make sure that we get the right resources in the right place at the right time which can be challenging with so many different directions and so many opportunities ahead of us. And long term rather and additive business Company that's focused on tech. It's a focus company that's focused on revenue diversification and with that, there's a lot of margin expansion up ahead. You gotta be optimistic about the future, making sure that we're allocating capital into the right places to fund the transformation.
There's a lot of margin expansion out the head. You gotta be optimistic about the future making sure that we're allocating capital into the right places to fund the transformation. For
90 consecutive years
DATE
general motor
ORG
sold more vehicles in
the United States
GPE
than any other manufacturer that streak ended in
2021
DATE
when
japanese
NORP
rival
Toyota
ORG
took the crown Record profits in
Paul Jacobson's
PERSON
first full year
DATE
as
CFO
ORG
and that's a good financial foundation for the task ahead. If you have a dashboard that you look at and see if At the
EV
ORG
transformation right now. Are there any reds on that dashboard? Well, I think we live in a world that seems to be red for everybody, right? That's been one of the one of the challenges. I mean, since I arrived here, year and
a half ago
DATE
, it's it's really been about the semiconductor challenges, the macro economic challenges, supply chain, etcetera. But That is just part of transformation, right? Not everything goes according to plan and you just gotta make sure that you set your sights on the horizon and make sure that we continue to track to it. I think the team's doing an extraordinary job. There's a lot of uncertainty out there and that's one of the things we have to manage. We're blessed with a tremendous balance sheet. The team's done an amazing job. Funding the pension, paying At which put this in a position where I don't actually have an aversion to using the balance sheet to continue on our path if we need to temporarily Cheap shortages and supply chain disruptions have driven global car sales volumes down from their
2018
DATE
peak but it may have long term benefits forcing companies like
GM
ORG
to tear down silos and bring teams together to find solution We actually is a management team all the senior leaders of the company get together once a week and we've been doing that for
a year and a half
DATE
to talk about here's what the forecast is here's what we're gonna do to mitigate it and here's how we're gonna And it's been one of the most amazing examples of collaboration I've ever seen in in my career. Functional leads or vice presidents There would lead a product development or design or sales or marketing or whatever that is you know it's really it's really everybody's together our staff meetings are together it's very very much one team and that's changed everything we've already talked about how we are simplifying the Can going to
three
CARDINAL
chip families that's gonna put us in a position where we're not as
beholden
GPE
to
hundreds and hundreds
CARDINAL
of chips depending on which vehicle where anyone of them might hinder production. So, lots of things across the horizons that we're doing to make sure that this becomes much much easier to navigate in the future. Global demand for metals used in batteries is already putting pressure on supply chains and driving costs higher. Commodities prices for those That are like lithium like cobalt that are used in EB batteries have
Sword
GPE
. Those materials also not are just expensive. They're generally in places that are have geopolitical issues. How do you address the things like lithium? Things like nickel. There's gonna be a shortage of how do you make sure you have that at a price you're gonna force you don't have a rapid spike up in the price. We're really looking at a multifaceted approach. Anything from traditional supply chain procurement type functions all the way to joint ventures or Term contracts. It's not about capturing the best price
today
DATE
. It's about capturing that consistency of the business model that we can plan around and anticipate going forward to make it easier to to fund this transformation. But while
Jacobson
PERSON
takes steps to head off headaches use also aware that
GM
ORG
's electric future holds huge I think the most exciting thing about the
EV
ORG
transformation is it's fundamentally gonna change the way we make money at general motors. Because if you think about it, the overwhelming majority of our profits come from the time that we sell a vehicle to a Right and and that vehicle enjoys a lot of revenue for very different companies over the life of of it on the road.
Revenue for very different companies over the life of other on the road. The electric vehicle and what connected vehicles are gonna do for us. In is increase the revenue opportunities for us over the life of that vehicle.
Second
ORDINAL
owner,
third
ORDINAL
owner,
fourth
ORDINAL
owner, because we're gonna be able to offer ways through over the air updates to customize it, subscriptions, various services, insurance packages, lots of different ways that we can interact with a customer Historically, we haven't been able to. How much of your top line, Total
Robins
PERSON
? Gonna come from selling vehicles as opposed to the services that you've just been describing. So if you go back to our industri day last year we talked about doubling our revenues while expanding our margins by
2030
DATE
. The doubling of the revenues are coming both from growth and auto sales because there's a big overlap and we're getting new customers
every day
DATE
on electric vehicles The ones that were taking reservations in orders for right now. So, what we talked about is
20 to
QUANTITY
25 1 billion dollars
MONEY
a year of revenue in
2030
DATE
around these services that we can provide going forward. So, it's
Massive
NORP
growth off of what we've currently experienced with
OnStar
ORG
historically and really excited about what that's gonna bring. Also expect significant growth to come from cruise. It owns
80%
PERCENT
of this startup that's developing autonomous vehicles. Despite considerable investment in advanced technology, the company has resisted the temptation to spin off these units so far. Is there a world can you envision as the chief financial officer a world in which you say you know what there's an old businesses and new business we should trade separately well there's a lot of commonalities between the businesses
About 7080, percent
PERCENT
of the vehicles are the same, right? They both need brakes, they need windows, they need features, inside the vehicle seats, etcetera. So, We can do to make the ice vehicles more efficient and more appealing to the customer is only gonna help us with our
EV
ORG
transformation and that's why that integrated approach is so critically important to help fund that journey for us going forward. Investors have indicated that there are long for the journey as well since
July 2020
DATE
shares of
North American
NORP
automakers have significantly outperformed
the SMP 500
LAW
even after broader economic and geopolitical turmoil drag them down from their peak By Wall St. The companies will now need to deliver on be prepared to deliver on that in a post supply chain world. A part of your job is to make sure that a wall street is getting the message that you want them to have about general motors. Where are you in that right now? Where is general motors in the perception on Wall St The extension which it really is a tech company on the forefront. Yeah, I think the challenge with what we did is we pulled out
10 year
DATE
goals. That's something that was kind of unheard of in the industry as well as as here at
GM
ORG
and now what we've gotta do the next phase is make sure that we're giving a road map to investors out there to say here's what you can expect to see in
the next 2 to 3 years
DATE
and as you see You should increase your confidence that we're on the journey to get where we need to be in
2030
DATE
.
Monthly
DATE
which is fine. Our goal is nothing more than execution at this point. As we produce and execute the confidence will Nothing is going to to take us off track from that execution we know we have the right strategy so that will come. About the long term. We're not running the company for the stock price
today
DATE
. We're running the company for value creation over the long term and I feel like we've got a really really good hand to play. Coming up
Paul Jacobson
PERSON
tells me what he's learned about
GM
ORG
's electric future from driving the brand new
Hummer EV
ORG
. Taught me number one you know what what are the concerns of the consumer that are ultimately in the driver of vehicles and then number
two
CARDINAL
where do we need to focus on addressing some of those anxious points for people and we visit the lab where
today
DATE
's investments are developing
tomorrow
DATE
's batteries
Chemistry
ORG
and say this is superior but can you replicate it
millions and millions
CARDINAL
of times across the entire portfolio
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now Type phrases in everyday
English
LANGUAGE
in the command line. Compare financials. You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Hear from leading economists Policy makers And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring just see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have That the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. General motor CEO
Mary Barra
PERSON
and President
Mark Royce
PERSON
are not only auto industry veterans their
second
ORDINAL
generation
GM
ORG
employees following fathers who both worked at the company
Paul Jacobson's
PERSON
new to the car business he launched his professional career at
Delta Airlines
ORG
including
7 years
DATE
as
CFO
ORG
before joining
GM
ORG
in
December of 2020
DATE
I started with
Delta
LOC
back in
1997
DATE
as a financial analyst business school and just had an incredibly blessed career there to be able to see and do so much and got to be treasurer through the bankruptcy which as a corporate finance person bankruptcy is the best experience you've ever hoped to repeat. But it gave me a really good platform Strategically across the board. Appreciates what
Jacobson
PERSON
brings to the mix. Others in the airlines or the auto business focusing on the customer and being best at sanitizing our customers whether it be designed whether it be the actual vehicle of an entry itself the experience in buying experience at the dealer whatever that is you know committing resources those places to grow The top
one
CARDINAL
.
Delta
LOC
we were a company that is
100%
PERCENT
focused on customer service and I had you know the opportunity to learn from
Richard Anderson
PERSON
and then
Bastion
ORG
on the finer arts of of leadership and and transformation and through a company that went through a lot here is very very different working for a manufacturing company is I I tell my wife all the time it's just it's amazing to be around people who build things. Assembly plants to ramp up
EV
ORG
production The objective to create a scalable platform that eventually dries down costs call jacobson took me to the laboratory where this Is taking shape So we're in the heart of
one
CARDINAL
of our battery testing labs where we test all aspects of the battery resiliency hot extreme temperatures shaking vibration etcetera So we are investing a ton into battery So around us we've got the testing We're also building a new manufacturing cell manufacturing test facility. We're gonna test different ways of manufacturing so cuz it's
one
CARDINAL
thing to look at chemistry and say this is superior but can you replicate it
one 1 million A millions
MONEY
of times across the entire portfolio. So, we're an execution mode. We're producing cells now at
Lordstown
GPE
. It will be rolling those out soon. We're already have these cells and the
Cadillac
ORG
lyric as well. But as far as techno
Now at
Lordstown
GPE
it will be rolling those out soon where already have these cells and omelette and the
Cadillac
ORG
lyric as well but as far as technology and chemistry I think we're just kinda the beginning of where where that might go over the long term. Do we go to solid state? Or or what? So, we're looking really at a portfolio approach to make sure Vehicle comes off
10 years
DATE
down the road what percentage of the cost of the vehicle will be just tied up in a battery like that well the battery in the motor systems are sort of the equivalent of the In the transmission
today
DATE
. It is, it is costing more, obviously, for, for those systems going forward, but we think that technology is gonna come down overtime as well, which is why we've said, we think we can get an electric vehicle to parody, profit parody, if you will, by
the end of the decade
DATE
. With their ice counter park. Profitable on the labor side at least in the manufacturing phase. You just looked at the powertrain of the vehicle, the parts that are different in a nice versus
about 40%
PERCENT
less labor hours
TIME
. Power train. There's
40%
PERCENT
less labor needed. But certain engineering skills are likely to command a premium. We're seeing auto companies on the engineering side Out in the marketplace competing for engineers that they're competing with video game companies so silicon
Valley
LOC
companies a different kind of engineered software engineers are you know really need it and so there's this big competition for back kind of Employee and and attracting them to the auto industry which is in considered you know an old rust belt industry. We've been hiring really aggressively over
the last couple of years
DATE
in software in chemistry in in just broad engineering across the board and what we found is people are attracted Employees are focused on. I wanna work for a company that shares my values. And when you look at what
GM
ORG
is doing in our pivot through electric vehicles. We find a lot of people wanna be a part of that.
Us
GPE
car buyers are also getting with the program sales of fully electric vehicles group by
85%
PERCENT
from
2020
DATE
to
2021
DATE
with Tesla accounting for
three
CARDINAL
of the five top selling models Hurdles remain and the issue of charging might be the biggest. Think of the reasons why people avoid an electric vehicle now
Four
CARDINAL
of the top
five
CARDINAL
reasons are related to chart
Us
GPE
charging infrastructure is steadily improving but consumers still worry about being stranded without power on road trips
Paul Jacobson
PERSON
assured me that when he takes the new
Hummer EV
ORG
on long journeys it's not just fun to drive it's equipped to go the distance I hear so much about road trip anxiety that I wanna do experience it myself my family likes to drive a lot so I brought my daughter home from college in this and and it was great I mean the computer system is all intuitive it tells you how to keep track of the battery it tells you where the charging stations are it tells you how much power you'll have when you get to the charging station so it really puts Out of your anxiety but as far as driving it, it is, it's a treat. So, where are you on the charging stations? I know general owners has made an investment and
one
CARDINAL
company. Well, how are we doing in this country generally and getting charging stations in? So, I think this is this is an area where obviously we can Can continue to improve as a country and a society. We're doing our best. We've committed almost a
one 1 billion dollars
MONEY
to
EV
ORG
charging. So, we've we've taken that and looked at home charging solutions, local community solutions, and road trip charging solutions. What? You know, with my daughter, what we would end up doing is
Plugging
ORG
it into a charger usually a high speed charger to get as much charge as we can and being there for
20 to 30 minutes
TIME
get a salary range and by the time we've used that range retired ready to stop
Saturday
DATE
. So, it was it was a really good experience for me and it's taught me number one, you know, what what are the concerns of the consumer that are ultimately in the driver of vehicles and then
number two
CARDINAL
, where do we need to focus on addressing some of those anxious points for people?
Number
one
CARDINAL
, you know, what what are the concerns of the consumer that are opening in the driver vehicles and then
number two
CARDINAL
, where do we need to focus on addressing some of those anxious points for people? Up next the battle for
EV
ORG
supremacy may be one or lost in
China
GPE
Paul Jacobson
PERSON
thinks
GM
ORG
is ready to take up the challenge the world is competitive right and and the world of electric vehicles is only gonna get It doesn't matter where you're operating in. He reflects on how the role of the
CFO
ORG
has changed over
the years
DATE
.
Today
DATE
's
CFO
ORG
has to be much much more than a bookkeeper. Has to be a strategic business partner at the table helping to see around the corner and helping to prepare the organization for what could happen. This is Bloomberg Companies now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to
Comprehensible
ORG
to the software that is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? In
2021
DATE
despite COVID lockdowns and supply chain breakdowns general motors delivered
nearly three 1 million
QUANTITY
vehicles in
China
GPE
and since
China
GPE
still taps the global market for electric vehicles
GM
ORG
expects it's foothole to be helpful as it New
EV
ORG
models. Role. We've got great JV partners. We do on the brands in
China
GPE
and so we've got you know good brand representation in the design of the And then also we've got the flexibility and something like our ultium architecture for batteries and cells that is flexible enough to handle the requirements of of a prismatic cell like CATL makes in
China
GPE
Stay favor some companies over other companies is that a risk potential for
GM
ORG
because you have some
Chinese
NORP
native companies where I can put that where I could BYD we believe we're in a good position At
the end of the day
DATE
, the world is competitive, right? And, and the world of electric vehicles is only gonna get more competitive. It doesn' Where you're operating in. So, we need to focus on the quality and the customer offerings that we have. Regardless of which market we might be going to. There's
one
CARDINAL
thing everyone agrees on when it comes to selling vehicles in
China
GPE
. The future is extremely difficult to project.
China
GPE
's been interesting because Penetration. To being a stick. On the industry with trading such. That's greatly favored the startups. And it's been harder for the traditional automakers both domestic and and the western automakers are foreign automakers there. In terms of the the subsidy and the this Very much depends quite a bit on the regulatory environment In shown as to what
China
GPE
looks like.
Regime on electric vehicles. So, Very much depends quite a bit on the regulatory environment In shown as to what
China
GPE
looks like in
2030
CARDINAL
Paul Jacobson
PERSON
tends to view the future with a healthy blend of optimism and pragmatism I asked him to look ahead at some big picture issues. Over
the next 10 years
DATE
excites you the most about opportunities for general motors. I think the most exciting thing over
the next 10 years
DATE
is we don't know about all the opportunities to generate revenue and serve the customer. So, I'm really excited about that. Okay, what are
the next 10 years
DATE
? Make sure most nervous. I'm not sure if it keeps you up at night but heads in that direction. Yeah, I think the thing that keeps me up at
night
TIME
over
Next 10 years
DATE
is just thinking about the macro landscape. The world is changing so rapidly. We have a lot of competitors coming at us and you know, we're gonna meet those challenges but we don't know what the world's gonna throw at us. We gotta make sure that we are very nimble We've talked a lot about the changes coming for general motors as you look at your job and see if how will that job have to change because of those changes in the movies. Well, I think as as you think about any
CFO
ORG
not just the moved EVs but just the move to We don't have time to look back over what happened
last year
DATE
or
last quarter
DATE
. What happened
last week
DATE
? What happened
yesterday
DATE
? How's the business performing? And how do we get real time information to the business leaders? Over the time that you've been to
CFO
ORG
what has changed most for you what skills have you had to develop Well, I think, you know, as as as OCFO's experience, you get, you get much, much more ingrained into the strategic side As I said
today
DATE
's
CFO
ORG
has to be much much more than a bookkeeper. Has to be a strategic business partner at the table helping to see around corners and helping to prepare the organization for what could happen. If somebody took the job to see if I had some company
today
DATE
what would you advice them Everyone is listen. Are there and their view is the people are there to say no alright I I like to challenge our team to how can we find a creative way to say yes how can we find solutions and ways to make things more efficient not just forgo them in
Louis
GPE
something else that can sometimes be hard for us we're all naturally skeptics that's what tends to do attract people into the Business. So, how are you skeptical with a good vent towards it to helping people accomplish their goal? Finding creative ways to say yes if
Paul Jacobson
PERSON
and his team can do that
GM
ORG
will be well on the way to delivering on its grand vision of transformation I'm
David Weston
PERSON
Is
Bloomberg
PERSON
That is a great question. Great question. I'm glad you asked that. We're independent.
David Weston
PERSON
. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. No one covers the world like
bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming true
No one covers the world like
Bloomberg
PERSON
. In
the coming months
DATE
. Not just cut and run.
24 hours
TIME
a day.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand Here from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the Internet revolution. Who kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. There's an old saying in finance that cash is king but when it comes to payments the data suggests that's no longer exactly the case according to the latest world pay report cash now figures
less than 20%
PERCENT
of in-person transactions around the world Hey from the beginning his his really focused on People to use electronic forms of of pain. In fact, if you look at like the
US
GPE
, for example, Basically have been moving around
two
CARDINAL
to three% of payments from cash and check to some form of of direct electronic just about
every single year
DATE
. Volume X
China
GPE
today
DATE
at
20 1 trillion dollars
MONEY
. And there's another
14 1 trillion dollars
MONEY
worth of cash and check left to digitize So yes we are moving towards a cash flow society A new technology is promised to kick these trends into a higher gear. The terminal on the till of the merchant. How depending on how old one is, one is used to that. At least then, the developed world. That is not everywhere but every one has a phone. Payment payment payments can end up in a super simple way that everybody's hands and for our business that's a massive growth of opportunity.
MasterCard
ORG
is already seizing that opportunity Driven by a rebound consumer spending. See if
Osach
GPE
and
Mehra
PERSON
knows this boom is like your fade. And he's set on finding ways to keep the momentum going. Being successful in this kind of environment is to have a diversified portfolio. You gotta be nimble from an expense standpoint. You gotta be very disciplined. As a finance officer, what I've gotta do is I've gotta make sure that we are investing in those resources Which are currently in demand from a customer standpoint but at the same time not losing sign of the long term. CEO
Michael Mibach
PERSON
counts on
Mayrodge
ORG
do more than just oversee the ballot sheet. The top line for me is
Visor
PERSON
and confident. Conciliary. The rule of the chief financial officer is actually changed value to medically over
this 20 plus year
DATE
10 year
DATE
that I've had. You know, in the past, it was more of a function of, you know,
The rule of the chief financial officer has actually changed value dramatically over
this 20 plus year
DATE
tenure that I've had. You know, in the past, it was more of a function of, you know, let's make sure the numbers are good. Let's make sure we got a great control environment. Let's make sure we're actually able to close the books on time. Let's make sure we've got all the financial elements of the business The job of the
CFO
ORG
in in our view in my view is a function of making sure we're creating the right linkage. What the purpose of the businesses, what the strategy of the business is, Delivering on the financial returns for the company all while driving long term shareholder town. We're in the business of leading beyond the numbers. It's great that we know what the numbers are. How do we use those numbers to better drive execution of the business to accomplish The strategy of the company. Mastercards core business is no surprise cards. Carded products currently account for
over half
CARDINAL
the company's revenue. The company said ambitious growth targets it is
2021
DATE
investor day. Committing to expand this core and to diversify beyond it. We've been on a
6 year
DATE
strategy to be a multi-rail company in plain
English
LANGUAGE
that means whichever way you pay people enable that despite the fact that card is an hour name is essentially any type of payment we have the reach so I think we're reasonably well positioned I mean you've just gotta recognize not only where Takes time to And it's a difficult you'll get some you'll get it right sometimes you'll get it wrong sometime but hopefully you're getting it right more often than anything you're wrong and you're working with that forecasting preferences is complicated by an uncertain economy consumer confidence has been plunging to historic lows and recession calls are getting louder still a slowdown isn't likely to cause a crisis for
Mastercar
PERSON
Its peers. To watch people often perceive I think famous as an industry it will be quite resilient in the downtown Generally speaking Even during a recession the amount that consumers spend actually does not go down. It continues to grow. I think the thing that people are worried about more in the payments industry is kind of how does the mix of spending change? The
first
ORDINAL
thing is that typically happens if you're going into a recession environment is people tend to pull back on discretionary categories of spend they move into the non discretionary categories of spend The evidence of food, they're pivoting to rent. Those kind of payments. Which are most important for them to meet. But the real still stay the same. So the real which run debit and credit are exactly the same the technology is the same the distribution models the same So those those areas don't necessarily change by about you off moving into more for debit or credit environment.
One
CARDINAL
area that master card has been moving vigorously into is
BtwoB
ORG
payments a market expected to reach
25 1 trillion dollars
MONEY
by
the end of the decade
DATE
Tremendous promise and the
BWB
ORG
area the card business as in the the elements of the B to B space which are served by cards. Are doing well. Are they doing very well? And it's in the small business space and the mid market. It's in the large corporate space. All of them do really well. On the accounts people side I would say we're in the building phase. And Whereabout building and open loop environment to enable payments on accounts payable rails. Where is the opportunity in that space is? Different to consumer payments where there is a global standard. The global standard is
MasterCard
ORG
. The global standard ah card payments because that's been established That isn't quite established yet and B to B and I think the more benefits we bring into the payments that are easier than just making a really complicated cross border payment I think we'll find our way there and See an explosion of creativity a lot of other companies coming in and using those rails innovating on top of them. Pursuing new opportunities takes capital
Mastercard
ORG
has spent
billions
CARDINAL
acquiring companies that add capacity and diversified its infrastructure. Acquisitions and partnerships have help master card offer more value added services to their clients tapping into a lucrative revenue stream What we call services which includes data insights consulting manner services loyalty and our fraud capabilities
Into a lucrative revenue stream. What we call services which includes data insights consulting manner services loyalty and our fraud capabilities is
roughly 35%
PERCENT
of the revenues of this company. Wow. Yeah. So, it's not insignificant. So, often times people think mass required and think card. Very important but there's a very different part of
Mexico
GPE
as well. Even as it's put more resources into acquisitions and taken on more debt given the company of flexibility to continue investing. Let's go and buy something. That is that is an opportunistic approach. It doesn't work for us. For me, it always starts. What are we trying to accomplish from a strategy standpoint? What are inherent capabilities we as a company have? What are the gaps in our capabilities to meet that strategy? And then follow those Is it best to build Or partner. We're out there and we're trying to find a right companies together. It's gonna make sure that we have a clear view on short and long-term synergies and so forth. And to investors to explain what we're doing and why we're doing it and why it's good. Shareholders have reason to appreciate
Mastercard
ORG
's capital allocation strategy. It's included
annual
DATE
share buybacks and steadily increased dividends. How do you prioritize the amount of money that you put toward innovation and toward building out different businesses versus share buybacks and dividends because master card is traditionally had rob Program in rewarding shareholders. Right.
First
ORDINAL
call of capital is to as growth of the business After we have done that it's about making sure we are being good students of capital and returning excess cash to shareholders with a bias to a share buybacks Once you start to come to say i have dealt with my strategic priorities I either have invested in my organic growth or in acquisitions then access cash we will return back
Preference
ORG
for buybacks over dividend because it gives a small flexibility but that's been a good model for us. It's been working well and well received by the market. Coming up how the tap has taken
Mastercard
PERSON
places that the swipe alone could not Particularly on the small ticket items. And later how Master As an on ram. This is
Bloomberg Japan's
PERSON
critical role in the global economy is changing as the world recalibrates.
Japan
GPE
's leaders are boarding a more innovative and sustainable path forward to revitalize the nation.
Corporate Giants
ORG
, policy makers, and pioneers tell us how they're doing just that.
Every week
DATE
on
Japan
GPE
ahead right here on
Bloomberg Television
ORG
. Such an error joint master card is group executive in corporate treasure in
2010
DATE
. Over
the next decade
DATE
, he took on several different roles before being appointed chief financial officer in
2019
DATE
. That's a very different path than the one he started out on. Hey undergraduate and then my brother and I got into and hey what put them for
three and a half years
DATE
then I came here for business school. The moment of truth came on graduation day. My dad got on the phone I'm looking forward to having back home. My brother was older than I am. Went to business school as well and went back home and worked with my dad. Congratulate me and said That's what dad wants you to do. And then it really got me thinking and I said hey give him a chance I'd love to work in finance in in the
US
GPE
Even though it took him
6 months
DATE
to land his
first
ORDINAL
job.
Hey give him a chance I'd love to work in finance in in the
US
GPE
General motors where he worked for over a decade. Then it was on to the energy industry it has corporation before finding his way to Master Today, my dad couldn't be prouder of the fact that you know, I chose the path I did. Obviously, he misses the fact that we're not there as a family but that's just part of life, right? We've all gotta grow in
Blossman Groom
PERSON
. Except at the beginning. It took him
all 30 minutes
TIME
to get there. When
Mera
PERSON
gets together with his team and the employee cafe and
Mastercards
PERSON
campus It's clear that these it is element. Well, more important, more fun stuff. What's the plan for
the weekend
DATE
? And of course the cafe provides a demonstration of the tap and go technology that's changed the game for payment companies Could I just go to regular coffee at home please? Of this. Yeah. Okay, that would be
571
CARDINAL
. You got it. We're gonna make this work. There we go. I think contactless is a very powerful catalyst for accelerating In
the last 2 years
DATE
what we have seen in the
US
GPE
is god penetration corrode
annually
DATE
has doubled What was
the average 5 years
DATE
the pandemic was one of the reasons people did want to touch Purchases the contact list definitely contributed to this It's made of change. It's really made a difference. What it's really made a difference on has been in terms of how it's driving a shift from cash to electronic payment. Particularly on the small ticket items. Which is really really important. Cos at
the end of the day
DATE
our model is as much about converting the dollar value of the spend as it is about the number of transactions Get over on
Netflix
GPE
. Transaction On which we can deliver services and that's really important
MasterCard
ORG
introduced
PayPal
ORG
it's
first
ORDINAL
contact list payment system in
2002
DATE
but the technology took some time to gain traction I would say we first invested in this many many many years ago the adoption rate on this in the early part even in
Marcus
LOC
like the
UK
GPE
Canada
GPE
Australia
GPE
was doing the early part the inflection point of when It really started to hit it straight was when it was used in the transit vertical. So what we figured is let's get on the transit systems around the globe. Enable for contactless technology. That will create muscle memory for the consumer who will like the experience and transit and we'll use it elsewhere. How do you judge the revenue proposition for Mastercard with innovation like that and the adoption and the pace of it? Look, I mean, for us, we're agnostic as the weather. Somebody's using the chip technology or the contact list technology or you know, using the
MagStripe
ORG
which was the old way of doing business. We on revenues which are quite similar Cross both of those. The revenue potential and upside for us comes from the fact that now more spend is being done on card based on supreme and then was being done in the past. So we're converting that cash over to electronic payment. Which is where the information comes from. If contact list payments is the current revolution sweeping the payments industry what's the next one I think
Smile
ORG
. Biometrics I think that's where it's gonna go. And I think we've reached that point of people are sick of too many passwords. People are sick of typing and stuff and there's also too many wallets and other ideas and stuff that is around. So why don't you just everybody has a smile? So just play with your smile. There you go. How much are you investing in that? How quickly do you see that becoming the next tap and go? Yeah. So look, I I think this is gonna take a while. These things have an adoption curve which typically is fairly flattened the early part and then you start to see some levels deep. The company has opened innovation centers in
Australia
GPE
,
India
GPE
,
Europe
LOC
,
Canada
GPE
, and
the United States
GPE
. These are Where we draw in customers where we draw the local community. We have them in big cities where the latest technology is the players are all around us. In
New York City
GPE
, it's in tech alley and everybody in the tech industry is around us. It's a point where people wanna work and the attractive best talent and we go and this brings us back.
It's a point where people wanna work and be attract the best talent and we go and this brings us back to the
CFO
ORG
. We go and look at our vitality index. So, how are the revenues looking? What is generated from new products? What do we see? Is there real momentum? Is there And if you overlay that and link that back to our tech hubs in these regions where we have them clearly that is what driving what is driving our new solutions. Woman investment standpoint. We try and make sure we've got our foot in the door and all of these new and emerging technologies. Cuz what we don't wanna do is play favourites
One
CARDINAL
versus the other. We wanna make sure we're investing just appropriate amounts of money to have skin in the game, to know that if this thing has got legs to it, we wanna be at the inflection point for them to write out. In your tech hubs can you act like bond
James Bond
PERSON
what are the queue movies and like the laboratories you walk in and they you know you sort of face off and clear the system and they serve to this Who can do that over again?
One
CARDINAL
of them. No that's not me. Coming up how mastercard has embraced the brave new world of cryptocurrency with all its ups and downs. Tells me what advice he'd offer a
CFO
ORG
just starting out in the job. I think it's important to stay calm. It's a border to recognize that change is going to happen. You can't fight change. This is bloomer. Imagine simply climbing a cable into space. The concept is known as the space elevator Not only could it significantly change how we leave planet earth But it could also completely transform humanities relationship with space. And there are scientists think we could have already built it We have the material. We have the technology. We have the lasers. We have the climbers. We have all of them. If a private entity wants to build it. Or a government It'll change society. We have no clue how colonizing in the space. How really spreading on the space. Really change our society over
the next 50 to 200 years
DATE
. It'll be completely different. Do you see that The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
. It's a really reminder isn't it just how sensitive the markets are to any commentary about trade we did see some pressure on the
UN
ORG
we did see some pressure in the future that is now being reversed Like many of its counterparts and the payments and financial services industry
MasterCard
ORG
has developed products and partnerships that bring cryptocurrencies into its networks. Payments and payment system perspective the the Players and and members that make up that ecosystem are really agnostic. To them, crypto is just another currency literally. Just another asset. At this point, Overall gravity contribution is still so small it's very early but if if I'm a hard company it's better to invest Companies for future revenue growth rate versus kind of sitting on the sidelines.
Crypto
ORG
is a term that encompasses a number of different projects including central bank digital currencies and private sector stable coins also digital acids like bitcoin he's volatile valuations is susceptibility to fraud have raised plenty
Central Bank
ORG
digital currencies and private sector stable coins also digital acids like bitcoin he's volatile valuations is susceptibility to fraud have raised plenty of anxiety among investors
Cards
ORG
long term plans to stay in the space haven't wavered. We're not really in the crypto hype of investing in our investing around do we like the fundamental technology in the promise that it brings to solve problems that have not been solved so if we see more revenue coming out of B to B solutions that leverage blockchain technology for example.
Tokenize
GPE
bank deposits. You know, just to throw out
one
CARDINAL
example. Across border payments, whatever it might be. In the crypto world we play the role as an on ram so people use
MasterCard
ORG
called products to buy crypto. Are they incredible products so that's the on gram if people wanna spend money as in fear currency to buy crypto and react as the off ramp and the offer amp is when people want in cash should We help them actually gain access to be able to use their crypto balances everywhere master cuts accepted We engage with
Central Banks on Central Bank
ORG
digital currencies. We engage with governments on how a policy could look like, how regulation could like, look like, Engage with the startup community and say come on in let's sit around the table in
one
CARDINAL
of our tech hubs and we discuss What solution actually is needed by whom and how we can bring it together. They have the greatest idea but the greatest idea needs a path to scale. That's what we can bring. Is there a potential liability because of the volatility because of how
Coin
ORG
and certain other cryptocurrencies have been painted. Is there any liability for
Mastercard
GPE
? Yeah. Well, too long as we follow our principles, we think we're in really good shape. And the principles we care deeply about our Stability as instability of the currency in question. Point number
two
CARDINAL
it must meet consumer protection requirements Me the laws of the land. And this is not new news to us. We've done this in the space for
the last 50 years
DATE
. For everything we've been working with regulated financial institutions on. And so which is why when we got into the space the first thing we did was to find principles. And we will keep abiding by the principles and what we do Yeah I feel happy because we're in the discussion Ecosystem 1 day it'll look like we'll be having done Many other spaces over years of of
the past years
DATE
Such an era is a leader within a company that has the power and reach to shape ecosystems and he'll be making strategic and financial decisions that shape the business. I wanted to know what he sees when he Ahead. Opportunity for Mastercard in
the next 10 years
DATE
that most excites you. Very sizable consumer payments opportunity Which we stand very well poised to actually capitalize on. This is the trend of the shift from cash to electronic forms of payment. If you think about it globally, there's still
a ton
QUANTITY
of cash. Which remains to be electronified. And that that opportunity is huge. The
second
ORDINAL
pillar for me is around we have identified over
the past few years
DATE
a sizable total addressable market in what we call new payment flows bucket
number three
CARDINAL
is around services it goes back to our insights and analytics are broad management capabilities Everything we are doing that space and then the last piece around you that works which is around open banking and digital light entity. What are some of the challenges for mastercard over
the next 10 years
DATE
that keep you up at
night
TIME
? Plugged in on what's going on from a technology innovation standpoint and making sure we're leading from the front not turning our back to it and saying we're gonna walk in the other direction. We've got to engage with people who could potentially be Disinmediators competitors to let them know what value we can bring while they're executing on their strategy. So, that's
number one
CARDINAL
. Number
two
CARDINAL
is Look I mean the world is getting More into a regulatory environment where regulation regulators are playing a bigger role nationalism is playing a bigger role it's important for us to continue do everything we are doing by being local. It's important to be a global company but be deemed local and that's gonna be important for us to execute on. At
the end of the day
DATE
, sitting in my role is
this year four
DATE
. Strategy is great versions fantastic but what really matters is can you really deliver and execute and we've gotta stay focused on execution and that's what we do every day. What's the biggest change that you see your role having over
the next 10 years
DATE
? Honestly I'm not Bit.
Execution and that's what we do every day. What's the biggest change that you see a role having over
the next 10 years
DATE
? That's a really good question hey honestly I'm not The business of predicting that much as it relates to how it's gonna change what I can see happening is greater emphasis on making sure We're leading from the front on executing but also failing fast and that's where a
CFO
ORG
can play a big role And by that I mean You're not always gonna win. There are things you're gonna do. Hopefully you get more right than wrong. But recognizing things which are not working out. And making sure you actually feel fast on them and get out of them. Because you can get you can fall in love with stuff. Keep doing it. Keep wasting resources. Don't only realise that it's not gonna pay off. And I think the emphasis around that is gonna only increase for that. Scapula resource environment. What advice would you give a
CFO
ORG
today
DATE
? Hey I think it's important to stay calm I think it's important to recognize that change is going to happen. You can't fight change What really matters is how you can get up and actually deal with that change. That's super important for a
CFO
ORG
. Being really clear and crisp in your communications. The outside world wants to hear in very simple terms. What exactly this company stands for and why they should believe that you are a good investment. I noticed I've said nothing about financials and I said nothing about necessarily financial infrastructure and systems because I do believe as a
CFO
ORG
. Those things are table sticks. You've gotta make sure that stuff happens. You gotta level technology. You gotta drive efficiency in the business. You gotta get the numbers right. You gotta have a good control in the moment. What's gonna call you apart is the is the other elements which I spoke If
Mastercard
GPE
can meet ambitious goals for growth in its core business Build on strategies that are taking payments to the next level such in Mary will deserve a lot of the credit. I'm
Lisa Abramoids
PERSON
. This is
Bloomberg
PERSON
. So is there more pressure when you're trying to win a basketball championship? Then when you're trying to please investors where's the greater pressure? Trying to win a championship. It's hard because a lot of like when you invest and you know this when you're investing You can control a lot more things You know, on a basketball court, you can't control whether somebody's gonna make a shot, you've gotta get lucky, and what's the greater pleasure making
five
CARDINAL
times your money on a distressed debt investment or winning the
NBA
ORG
championship? They're both fabulous I I I wish I could do
one
CARDINAL
each year that would be great but Think there's a great feeling in being right on an investment that you've done a tremendous amount of work and you've made money for your clients which I think is great. I think winning a championship It's a very surreal feeling because there's a whole city or state that is actually behind you You know, we had
70 1000
CARDINAL
people at the finals and we had them all outside. It's
17 1000
CARDINAL
in stands. And then literally like
60 1000
CARDINAL
people outside And when we won like just the joy that you had brought to the city was phenomenal. We make it very transparent to the shopper before they accept an order. What's the order? It's gonna look like, how much we're gonna pay them, and how much like the consumer is paying them. And so they can decide whether they take an order or was else it refuse it. And that's a kind of flexibility, lot of shoppers really
Value
ORG
is a kind of transparency that they want. Are you seeing a labor shortage right now? And what are you doing to to combat that? It's different in different places. All demographic of shoppers is
Different
ORG
from food delivery and rate sharing. We have
70%
PERCENT
women and
half
CARDINAL
of them moms. And that's because a lot of the job on
Instagram
NORP
is very different and just being in the car with strangers. It's about
We have
70%
PERCENT
women and
half
CARDINAL
of them moms and that's because a lot of the job at
Instacart
ORG
is very different and just being in the call with strangers it's about like going to the store doing a good job of customer service of really picking the right products for the consumer and we are seeing that being very appealing to women Markets are preparing to close but the day is not over yet.
About 45%
PERCENT
. Global asset market. Bitcoin ain't buying along
today
DATE
it's gonna be short term
China
GPE
slows the
fed
ORG
worries and former President
Trump
PERSON
strikes back. I'm
David Weston
PERSON
. This
week
DATE
's special contributor
Larry Summers
PERSON
of
Harvard
ORG
on where the housing market is headed. We're looking towards
Zombie
GPE
companies. Money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere. It was
a week
DATE
of signals. Some subtle and some not.
China
GPE
sent an unmistakable signal that it's economy is slowing. Something that a
10
CARDINAL
basis point rate cut doesn't seem likely to fix. She is confronting a number of both you know short term and long term challenges. Right now, I probably the number
one
CARDINAL
thing is the poor performance of the economy. Former President
Trump
PERSON
kept up his attack on
Republicans
NORP
who supported his impeachment so Congressman
Liz Chaney
PERSON
of Wyoming said she wouldn't stop even after she was soundly beaten in her primary. I have said since
January 6
DATE
that i will do whatever it takes to ensure
Donald Trump
PERSON
is never again anywhere near the oval office and I mean it. And there was nothing subtle about the inflation signal we got out of
Great Britain
GPE
coming in
over 10%
PERCENT
and apparently headed even higher. I'd go to the
UK
GPE
where you're seeing an explosive move higher in
UK
GPE
guilt yields
Tom
PERSON
and I don't think I'm overdoing it using that language Becoming entrenched. Reading
the minutes
TIME
you have to feel that this is a sort of a doveish lead and it supports chairman
J Powell
PERSON
's tone at the news conference following the
June 27
DATE
meeting beneficials noted Some parts of the economy notably housing. We're starting to slow as a result of higher interest rates. And if you wanted confirmation of just how big is those fed minutes were just take a look at the markets
this week
DATE
with the S and P Climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt I concerned about bonds with the yield
Climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt by concern Just under three%
297
CARDINAL
. To help us understand what the market may be trying to tell us welcome to
Bob Prince
PERSON
he's co chief investment officer for
Bridgewater Associates
ORG
and
Ed
PERSON
Hyman chair of Evercore ISI and vice chair of Evercore Partners And let me start with you. You follow the economy and what's going on with the economy. We've talked about the markets. We've talked about the
fed
ORG
. What's the economy telling us? Well it kinda makes it
two
CARDINAL
parts to it obviously
one
CARDINAL
part is what real GDP is or auto sales then there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part the economy is doing okay as you know we serve a companies And our retail survey dropped sharply
this week
DATE
but still pretty elevated Housing is really getting hit But on balancing economy is doing okay I think it's probably going
two
CARDINAL
or three% but headed to
one% Bank
ORG
loans came out
this afternoon
TIME
and they're up
11%
PERCENT
now And retail sales
this week
DATE
we're you know pretty decent On inflation which is much more important I I'm pretty convinced that inflation is slowing Of oil prices came down gasoline prices came down And In the weeds used car prices dropped about
three%
GPE
and
the latest month
DATE
And we survey Retailers pricing power that's now plunging you've heard the stories about the inventory is being high and we have been tracking that for a long time it's now really coming down. But the most important part and we don't get my state on this or wages. And obviously the labor markets are very tight But they had from the conference board
this week
DATE
A measure of CEO conference was almost a record low. And another survey That showed
80%
PERCENT
of workers We're concerned about losing their job. Go figure that But we serve a employment agencies
every week
DATE
And ask him among other things about wage pressure and that's now pretty clearly hooked down So I think you're beginning to see some moderation in wages on top of you know prices now cooling An economies calling So
Bob Ed
PERSON
sees inflation started to come down questions how fast is coming down but starting to How do you see it? And is it coming down enough and fast enough so the
fed
ORG
will not have to go much further in redhawks? It's definitely on the down but the question is where is it settle out The markets are discounting. The markets are discounting
two and a half
DATE
And you know, we're coming down from
six
CARDINAL
. Or higher on the core, right? So, but there are really
two
CARDINAL
big imbalances in the economy right now that are need to be resolved through this tightening cycle and we're we're still in this tightening cycle It's it's too early to really see the effects. It hasn't been that long to see the effects and so chances are you're gonna get more that weakness as you as you go along. But there are there are
two
CARDINAL
big inbounds in the economy right now that that they're gonna have to be All one is the level of nominal spending in relation to the to the output capacity of labor Over
the past year
DATE
, nominal spending is up
10%
PERCENT
. And incomes are up
10%
PERCENT
, and if incomes are up
10%
PERCENT
, that gets spent and you get more spending at
10%
PERCENT
. You gotta bring incomes down And if incomes are growing by
10%
PERCENT
but labor can only produce goods at the rate of four%. You get a
six%
NORP
inflation rate And that's the basic that's the first imbalance and that's the basic cause of the inflation that we have right now. It's really not the supply chain. It's just too much spending. Which came from the monetization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of
James
PERSON
it's just too much spending Which came from the monetization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of nominal spending in relation to bonyards. So nominal spending is even higher above bonus than it is above output. It's, you know, seven, seven%, above bonus. So, it's a highest in
60 years
DATE
. So, if, if, if spending, if people's incomes are growing Well beyond bony yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit and so that the the credit numbers that is referring to loans up
11
CARDINAL
You know that's a backstop on the economy and spending. So so it's it's the high level of spending an incoming relation to interest rates and and labor labor production. And it's the availability of credit to sustain that and it and that'll means that you have Get a tightening reminder policy and it sustained tightening amountary policy to bring about an equal librarian. Where are with wages and that wage price spiral because in fact if we are gonna have continued inflation people are gonna wanna make more money they're gonna go to their bosses and say you need to pay me more Well Now, I really bearish. So, they're not gonna be happy. If you have and see you on, but your
Bob
PERSON
and I think about the same way. But money growth has been slowing for
about 18 months
DATE
. We'll talk about that because it was growing gangbusters for a long time. Right. But you're saying it's turned around. So, in the conventional way, you had the checks you had the quantity of easing in low interest rate And some money growth got up to
almost 30%
PERCENT
Which is obviously extremely fast and that's why you have the strong number growth. Now, with figures I got
this afternoon
TIME
on bank deposits, money growth is well less than five%. And so we've set up The mechanism for this novel growth which is way too fast to slow down but that's what has to happen and obviously, this is a really interesting thing. If it slows down Does it come out of real growth or at a prices? If you have your
10%
PERCENT
normal growth which everybody can understand I think Right now it's about
one%
ORG
real and a nine% price right and if you go to say five% nominal Of what's the mix then? Right Should that fix the inflation problem or at least take us a long way to fix it. Your total in an economy they're they're total sources of funds is your sources for spending and there are
three
CARDINAL
sources there's money There's credit and there's income, right? And so, when you get the tightening of monitor policy, they're contracting money and that's absolutely right. The
first
ORDINAL
effect of a contraction in money is on asset markets Because if you think about the printing of money by the by the fattering of the central bank they print the money and then they go buy bonds or they print the money and that money then goes into stocks so that money had more most directly effects of financial markets Credit more goes into spending, right? Because, you know, you take out an auto loan to buy a car, you don't take out an auto loan to buy a bond and the
fed
ORG
doesn't print money to buy a car, they print money to buy financial assets. So, so what you have is a push pull The contraction in liquidity from the central bank is a drag on the financial markets While they're expansion of credit And so you've got you got that work in both directions right now. To me at least credits going up that sounds like it's good it's gonna spur growth but that makes it sound like Actually gonna make the implementation There's a
fed
ORG
need the credit to come in. So, probably. So, in my view of it, which is a straight
Milton Freeman
PERSON
take of it Of those
three
CARDINAL
pieces that
Bob
PERSON
point out The
first
ORDINAL
one is where it starts.
Milton Freeman
PERSON
Take of it of those
three
CARDINAL
pieces that
Bob
PERSON
pointed out The
first
ORDINAL
one is where it starts Is the money growth And I track global short rates. It's a global economy and they've a higher impact on the use economy than fed funds and they've been going up for
about 18 months
DATE
. Same time that money grows has been slowing. So, I think we're pretty deep in this and we had a pretty good drop in the stock market to your point And and now inflation's coming down the markets are
Beginning
ORG
to think that this is Introduction to the next chapter That the next peel of the onion. So, the money is the
first
ORDINAL
thing, right? The but what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent effects, right? Which means Have to be in a tightening cycle for long enough for that to happen, right? And we've been in a tightening cycle for how
many weeks
DATE
? Right?
18 months
DATE
. Exactly. You have to be alone enough, right? And so, you know, as we look forward Think that there's there's gonna be it's too early to tell really how this plays out in terms of whether it's wheat growth or high inflation or which one but You're probably gonna get some combination of wheat growth high inflation and rising interest rates And all
three
CARDINAL
of those are are rough on asset prices The mix is gonna be determined mostly by how aggressively the
fed
ORG
And other central banks tighten and and stay tight if they have to pay the price of a downturn. Turn next. So, what is really for investors? So, it's too soon to tell. What do we do in the meantime? Or waiting for those answers.
Bob Prince
PERSON
and
Edmond
PERSON
will be back with us for more Wall St Week after the break. Tag on the product may read made in the
USA
GPE
but the sign on
Often
PERSON
says made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
my current technology
Sanjay Mayhotra
PERSON
and that's just Added the cheap executives of
Adobe
ORG
,
Deloitte
ORG
, Gap,
VMware
ORG
, and that doesn'
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top?
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up about Reforce of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
and it's New construction contracts faltered and while unemployment actually went down more significant was back to back
monthly
DATE
declines and paying jobs. The bottom line seem to be that the economy was beginning to move forward but with many a lagging part.
Friends and pain jobs The bottom line seem to be that the economy was beginning to move forward but with many are lagging part And overall at a pace that would embarrass the tortoise. That was
Lewis Ruckhazer
PERSON
on Wall St wave back in
August of 1991
DATE
when
the United States
GPE
had just come off of a wrongly mild and short recession the number
one
CARDINAL
song if your murder was
Brian Adams
PERSON
everything I do I do it for you and the top movie was terminated too judgment day still with her Bob Prince of Bridgewater and
Ed
PERSON
Hyman if ever course so it's a Different world
today Bob
PERSON
. For example, on the job situation, we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are in the tightening cycle, what comes next? What does that say to an investor? Well right now we're in that in between stage right now right so you if you if you go back just to not too many months It became evident that we had a self sustained inflation that there was gonna be a tight near monetary policy. The market's priced that in yields went up You got to take me in a policy it's still happening It's not over
Mark
PERSON
has got a little bit excited about the dip in some of the inflation. They started by down that yield. But we've already given up
half
CARDINAL
of the yield rise that occurred in that actually means the
fed
ORG
needs to do more than if the yields had stayed up where they were, right? Including equity. So, So, we're still in this thing. We're still in this tightening cycle And like I said there there are really there's gonna be a mixture of
three
CARDINAL
things and you don't know what the mix is yet cuz it's too early to tell but you're gonna get some mixture of wheat growth high inflation and rising interest rates. The more the interest rates rise, the more it's the wheat growth, Let's see interest rate rise the more it's the high inflation Takes the foot off the brake you're gonna that that inflation improvement's gonna go away and you're gonna you know they're gonna favor growth so you don't know which which how they're gonna play it quite yet. So what we try to do in this kind of environment is is maintain some balance, right? Diversification obviously. Don't Too heavily committed to anyone direction but also even within the equity market you know structure in equity portfolios that have AA cash flow and balance sheet base under them. So that if if the tightening is very aggressive that there's a strong enough Sheet to hold that up to to sustain their their position in the market so a sustain a positive cash flow and I think that they companies that are you have a lot of debt in relation to enterprise value or vulnerable profit margins that sort of thing you know are they are the type that are most vulnerable for that So it sounds like an awful lot hinges on the
fed
ORG
. Surprise, surprise.
Jackson Hole
GPE
coming up
next week
DATE
, okay? A lot of people weren't paying attention to
Jay Powell
PERSON
, weighs the same. Remember,
last year
DATE
, at this event, he was talking about transitory still. That doesn't work so well
this year
DATE
, right? So, how much guidance can the
Fed
ORG
give us what exactly where they're heading? Just talking about. Well, it's hard to hard to know. I do think we're gonna get a financial crisis, some where, somewhere pretty soon It's always been part of the of the tightening cycle But like you point out David, yo,
last year
DATE
, it was really about transitory. He had
five
CARDINAL
Went through
five
CARDINAL
different things that would prove transitory And I I personally think the fit is now on the other side of the wrong foot. You know, now they're doing the entrenched and you know,
a year ago
DATE
, I thought buying us to go to five% and fed funds go to five% and I'm not quite sure what's happened but
Mardi Gras
PERSON
did flow dramatically And combine prices here and come down dramatically I'm saying pricing power coming down and so I think we've made a lot more progress on inflation than I expected and and that's why the market was going up until
today
DATE
but that's that's if inflation keeps coming down Then the market is gonna appreciate that. I don't understand
Bob
PERSON
we heard why
Ed
PERSON
thinks the feds job maybe he's got a bit easier actually with some of the things that have happened but financial conditions Have not tightened. Actually, if anything, get that in someone looser. That makes the
fed
ORG
job harder, does it not?
Text the
first
ORDINAL
job harder is it now? Literally
the first quarter
DATE
that markets were doing the
Fed
ORG
's job entirely. Yeah. In the
fed
ORG
joined in And once the
Fed
ORG
joined in and the market saw some you know positive signs of inflation you know they actually pull back and so bonus came back down equity yields you know came back down And so You know, that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted. If if yields had stayed where they were It would be that much less that the
Fed
ORG
needs to do but the fact that the yields have actually dropped some and can kinda give him back some of the work that they were doing. It's that much more that the
Fed
ORG
needs to do. And so, I think, you know, it's
Ed
PERSON
referred to last that you know you you raised it and then you know we
About last year's
DATE
Jackson Holstein
ORG
They were clearly wrong about transitory inflation. If if you actually look at the indicators that they follow and they tend to be lagging indicators. I haven't heard yet an explanation about how they think inflation, why they think there is an inflation, why they think that that was wrong, and I think that that causes some cause you to question How well this this process is gonna be managed to be very tricky. Well, that's a really powerful point I think. Explain to us what went wrong and why they're not gonna do a mistake again for us to really believe in this time. Oh, be helpful. But you know, from As you can see What they missed was that fiscal stimulus quantitative easing led to a
30%
PERCENT
increase in the money supply and that did it If you look back at that
Jackson
PERSON
home they completely missed that. Now money growth is plunging and commit prices are coming down. All sorts of signs that are early signs and so the job's not over by any means. But there's progress If you look back like pickate the 70s when inflation peaked The stock market started to respond to that. When you had a very high inflation period, like we have now. Do you agree with
Ed
PERSON
that in all likely we'll have some sort of financial crisis? That's what happening, happens in serious tight Odds are pretty good yeah Yeah I mean we haven't had enough tightening down to really have that Odds are good. Yeah. I mean, we haven't had the downturn yet. If there's gonna be a downturn, it hasn't happened yet. It's gonna be hard to bring inflation down. Are you gonna bring nominal spending down from
10%
PERCENT
to five% Without a significant Incredible you need to slow credit growth by
about half
CARDINAL
money growth is slowed but you need to slow credit growth in
half
CARDINAL
but it's still rising you're gonna have to you're gonna have to hold interest rates up enough and that's when thing that's when bad things happen Day. This is not a bad thing. It's a real treat. They had the
two
CARDINAL
of you here in Wall St. We really thank you so much. That is
Ed Himan
PERSON
. I've ever caught and
Bob Prince
PERSON
of Bridgewater. Coming up, we'll take a look at what's coming up
next week
DATE
on global Wall St. That's next on Wall St on
Bloomberg
GPE
.
David Weston
PERSON
. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio
Certain game that we haven't had to deal with. Television and radio. Is that communicating via video is not a bad that we are using in all aspects of our lives for work or learning for communicating for staying in touch. This is Wall St Week. I'm
David Weston
PERSON
. Let's take a Coming up
next week
DATE
on
Global Wall St
WORK_OF_ART
starting with Julia
Sally
PERSON
in
Singapore
GPE
. Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan prime rate also on the
Slater
PERSON
interest rate decisions from
Central Banks
ORG
in
South Korea
GPE
and
Indonesia
GPE
inflation figures from
Singapore
GPE
and
Hong Kong
GPE
trade data Earnings across the region include
Qantas Petro
ORG
China
GPE
and food delivery giant meat
one
CARDINAL
Bloomberg
PERSON
intelligence forecast
Chinese
NORP
companies may be set to report their worst earnings performance in
2 years
DATE
The focus in
Europe
LOC
for
the coming week
DATE
will be the energy crisis in
Europe
LOC
and we had a lot of developments in
the week
DATE
prior you had the
Ryan
PERSON
dropping to levels that made it untenable to have shipments across it you had record high energy prices in
France
GPE
and
Germany
GPE
you also had not gaps prices reaching new records as So, as we head into
this week
DATE
, the question is going to be how this impact industry, how it impact individuals, will there be more demand rationing and demand destruction. We've already seen some of it with different industry having to shut down power plants but how much worse can it get and what will be the impact on the economy? Big weekend economics we have the jackson wholesale coming up and I think our
Bloomberg
GPE
economics team really focus to hear some hawkish comments from chairman
Jay Powell
PERSON
reassuring the markets there was no pivot and that we are still to go in
September
DATE
for
50 or
CARDINAL
75
CARDINAL
basis points away from economics Just some of the fundamentals as well.
Big week
DATE
for earnings too. Zoom of course the video conferencing company. How do they sort of continue to grow in the face that further reopening trade maybe less demand for that product? Finally,
Peloton
ORG
. We've heard a lot from this company about as Some of the bikes at home, a lot of cost cutting initiatives, all the help sort of get that company back on track. That too will be a key focus for us
next week
DATE
. Thanks to
Juliet Sally
PERSON
,
Danny Burger
PERSON
, and
Taylor Rigg
PERSON
. Well some of those who maybe caught are those so called zombie companies who've loaded up on debt when it was cheap. International finance. That's next on Wall St Week on
Bloomberg
PERSON
. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution
When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trait about
80 and 90%
PERCENT
of all the world's goods are transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. About three% of all the worlds is huge, true mission Come from shipping. Output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement? To help reduce the emissions from these well stocked maritime behemoths. It was nice while it lasted. All that support from the
fed
ORG
from oh interest rates. More directly These lending powers to an unprecedented extent enabled in large part by the financial backing from the
congress
ORG
and the treasury. We will continue to use these powers forcefully, proactively, and aggressively until we're confident that we are solidly on the road to recovery. All of which allowed companies to borrow as much as they wanted which was worrying to rust Of
Black Rock
LOC
as much as
4 years ago
DATE
. The
800
CARDINAL
lb gorilla which eventually we're all gonna have to question is whether or not this build up in corporate leverage which we've seen over
the past 3 or 4 years
DATE
. Is that sustainable? But now those happy
days
DATE
are over. As the
Fed
ORG
has reversed course and says
Early next year
DATE
when inflation is very likely going to be well well in excess of our target I just think it's not realistic where does that leave all those companies who borrowed so much well at least some of them are so called zom No not those zombies companies that don't generate enough cash to pay their debt and that leads economists like
Neuro Robine
ORG
to say we're going to see some of them fail which may just be what we need to get to the other side Where Zombies are gonna collapse. And to take us to the strange and exotic world of zombie companies who have enough sonia gibbs she's managing director and headed sustainable finance at
the institute of international finance
ORG
so
Sonia
PERSON
thank you so much for joining us on Wall St Week let me start with those
Zombie
GPE
company and how many of them are there out there
First
ORDINAL
of all, to take a step back. What you need to think about is that over
the past 10 or 15 years
DATE
, global debt levels have skyrocketed. We've had very low interest rates and for example, non-financial corporate debt around the world is now close to
100%
PERCENT
of GDP. And that's more than double what it was Okay to go. So that's a very worrying backdrop. And so what we mean by zombie companies is a company that essentially has to borrow to keep going. They are highly leveraged. They're not growing very fast. They're revenues are not up to par. And at the moment they face a very difficult situation you've got higher input cost so your commodity prices are higher wages are rising at the same time you don't earn enough revenue to cover all of these higher costs and your debt service so if you have a.
Hey Same time
Earn
ORG
enough revenue to cover all of these higher costs and your debt service. So, if you have a ratio of revenues to interest costs that's
one
CARDINAL
or less, if you can barely cover your debt service cost. We call you a zombie company and it's a very good name. It's very evocative. And for how many it means difficult to calculate right because for a lot of firms that for example art publicly listed the information might be less available it might be smaller non-public companies
The Federal Reserve
ORG
estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
firms fall into this category. And it's also important to remember that this is not a static world. It's not once a zombie, always a zombie. Conditions change and in fact, becoming a zombie company is a little bit cyclical. In the sense that when times are good, maybe interest rates are low, growth is high, maybe you're not a zombie. But then, you know, bad things happen. Pandemics happen. Shocks happen. Interest rates go up. And a company that was formerly doing reasonably well Might suddenly fall into the zombie category. So you mentioned the overall debt load it's true certainly in
the United States
GPE
and not just in
United States
GPE
and part because interest rates are so low there's some very very successful healthy companies that load it up on debt cuz it was so cheap but and whenever we've talked about this risk in
the last few years
DATE
I said don't worry as long as interest rates are low we're fine it looks like those days maybe on their way We're gonna have higher interest rates. So, what kind of pressure is that put on these zombie companies? Well, I think it's a good analogy, right? It's all fine until it's not and so you've had a kind of a confluence of factors that have hit. Pretty much at the same time, you had a pandemic which hit growth. You had commodity price shock, you have rising inflation, you have Interest rates and you also have firms who's who's business models. For example, have been entirely changed by the pandemic. I mean, amongst the list of zombie companies you might find a company like we work. You know, a company that has been very successful but at the same time, the pandemic has changed a lot of things for that for that company. Carnival cruise lines. There's another good example of a type of company who's now in the zombie category or some of the meme stocks. You know,
AMC
ORG
, your game stop. So, these are really household names and I think that the difficulty is at a point in time when you've got wages rising, when you have higher input costs. These firms may Be able to borrow as much as they need to borrow to keep afloat. Tend to find zombie companies concentrate in certain sectors or in certain size corporations? I think it's fair to say that the the sectors that are worsed off in terms of percentage of zombie firms are probably in manufacturing and in retail and retail of courses industry that's undergoing secular change over the long term as we move to sort of more online no less brick and mortar think there there are underlying structural issues there and in Sector in any case but I think some of the companies that are hardest hit tend to be smaller firms and if you think about a small company, there's sort of inherently faced greater credit risks than some of the larger, better established companies that have long standing histories and track records in borrowing. They're, you know Familiar to investors smaller companies have a harder time accessing funds especially when when borrowing conditions are are difficult and with some of these companies having fallen on hard times during the pandemic you know there are estimates that suggested in some cases
as much as 25 30%
PERCENT
of the small Companies especially if you include unlisted companies could be falling into this sort of zombie trap I wonder saying about the larger effects on the economy. Obviously, we don't wish ill for any corporation but there's gonna be a lot of stress put on a lot of the companies you're describing right now. Ain't so far is that all gets sorted out to use a eufacium perhaps. Is there some benefit for the economy and redeploying the capital they represent into things that might be more productive than their I think we might wanna think about this in a short term and a long term context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here
Context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here which is spend
over 800 1 billion US dollars
MONEY
since the pandemic hit to support its companies so you avoid bankruptcy, you keep people employed, you keep these company afloat, but there Longer term cost to be paid for that because when you think about it Money that's being spent to keep zombie companies afloat Is money that could be more productively deployed elsewhere. You could put it into capital spending. You could put it into infrastructure. You could put it in a new industry. It's new technology maybe. In the ESG world or green technology that can really deliver a boost to productivity and growth. So it's kind of a foregone
Energy
ORG
in that sense. At the same time for the reason you describe and the example of
Japan
GPE
is a good one. It strikes me. There are political consequences of letting zombie companies go bally up. You know that the politics of these things are are always difficult, right? In
one
CARDINAL
of the the conclusion is that you can come to is it if you have a high proportion of of zombie companies if you have companies that you're worried about keeping a float there's political pressure to keep that going. The more that borrowing cost rise, the more the interest rate rise, the harder time these companies will have keeping going. So if you're in a world where inflation is rising and you have central banks having to make a very difficult balance Controlling inflation and supporting growth which can involve supporting some of these less profitable companies. You know, it's a it's a it's a rock Place. You know, where do you where do you draw the line? You if in fact the
Fed
ORG
could be held responsible for this money as I'll be company and maybe it's not what they're intent but it certainly was a consequence of extraordinary low interest rates for a long time. For everything really but certainly it was an inadvertent consequence of of low interest rates. So I mean if you think of the the many many years when we had low and in some countries even negative interest rates there were warnings sounded The time. There are risks to financial stability. There are risks to long-term growth. It's going to stoke inflation. It's going to distort financial markets. Is this store asset valuations? And in fact you can think of zombie companies as a type of distorted asset valuation right because accompanying a bit cannot generate enough revenue to support its debt service and it's running costs arguably is trading at an inflated valuation because it can continue to borrow at low rates so you
Sort
PERSON
of put it on the backs of central banks but it's it's certainly an inadvertent consequence of something that had to be done to keep growth going during the the after the financial crisis.
Sonia
GPE
, thank you so much for that. Tour of the exotic world of zombie companies. That's
Sonia Gibbs
PERSON
. She is from
the Institute of International Finance
ORG
. Pleasure to be here.
Larry Summers
PERSON
of
Harvard
ORG
. This is Wall St Week on
Bloomberg
PERSON
It is crucially important and I think we'd move from this attitude from it's an indulgence a waste of time almost an illness that needs a cure. For something as universally important to human life
Mystery
LOC
surrounding its necessity and utility have only just been recently uncovered
Discoveries
PRODUCT
were in the
1970
DATE
's or
1980
DATE
's and so it makes that a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going from
We're in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our understanding. It's easy to memorize things that makes you smart. It can spit back a lot of back. But if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what you bring figures out while you're sleeping. This is Walsh St. I'm
David West
PERSON
and we're gonna wrap up
the week
DATE
once again with our special contributor,
Larry Summers
PERSON
of
Harvard
ORG
.
Larry
PERSON
, thanks so much for being back with us. So, let's start with those fed minutes. Everybody was waiting for eagerly and they Markets didn't know quite what to do with them what did you make out of those minutes They confirmed what I suspected Which was that the
fed
ORG
doesn't know where it is That the world is very ambiguous at this point And A meeting or a very poor way to convey
Collective Look
PERSON
the
fed
ORG
has a fundamental problem About which it is not yet willing to be realistic And that is that it is exceedingly unlikely That inflation can be brought down to target levels Without a substantial increase in unemployment they To be very concerned about unemployment and about inflation and the reality is that it's probably not so realistic to think that they're Get inflation all the way down without getting unemployment up They don't wanna acknowledge that and that forces a certain confusion Into all of their
Understand
FAC
why they don't want to acknowledge that part of the problem is they've taken on an excessive obligation To communicate. So, I think there are a very very difficult situation. I don't know to what extent they're gonna choose to take the pain that is ahead They're gonna choose to take it on the Side Remains to be seen. I suspect in some ultimate sense, they don't really know. Either which way it's going to go, it's gotta worry them. That Financial conditions are now When in the middle of a tightening cycle Conditions were substantially loosening That has to make a central bank. Nervous. David there's
one
CARDINAL
other aspect of this situation that I think is very important and under recognized What's happening with
Russia
GPE
and
Ukraine
GPE
what's happening with droughts all of it they don't really fully internalize that oil prices and wheat prices have both come down substantially and are predicted Come down substantially in the future. Concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that.
To focus on concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that Line inflation is lower I inflation I don't see it with respect to the wage numbers I don't see it with respect to the median or trimmed mean Measures Substantial Inflation challenge ahead of us. One of the things that
fed
ORG
emphasize in the minutes. Besides really being concerned about inflation expectations. On the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your take of the housing market. Some people say we're in a housing recession right now. I think you have to distinguish
Movers
NORP
from stairs or to put a differently you have to Look at you have to think about what the right way to look at rents is. Here's what's true What's true is that last year People who were signing new leases We're paying
15 or 20%
PERCENT
more than they had
a year ago
DATE
. Nothing like that Fatty into The consumer pricing decks or the feds preferred measures a
PCE
ORG
index All the fed through Small fraction of people who saw their rents change And a constant rent for everybody else. What that means is that down the road like now You're seeing inflation Substantial increases and so we're gonna see Housing price inflation in the measures of inflation that are used For
another 6 to 9 months
DATE
that's a different thing than what builders are responding to builders aren't responding to that builders are responding to what they think the price of houses will be
a year from now
DATE
and that come down and Building and that's what happens when interest rates go when interest rates go up in some ways it makes sense if we're gonna have It's better to have a decline in something where we've already got a huge stock of it and it's only the new flow that's being affected Van in Continuous basis That doesn't have any duration to it But I do think we're Towards In the future With respect to housing and I'm sure they'll be differential impacts in different parts of the country as I say my best guess is that we will have a meaningful recession sometime in
the next 2 years
DATE
and if so I think Considerably more pain with respect to housing ahead.
Larry
PERSON
, we're gonna talk about softness and slowing. We certainly saw that in numbers coming out of
China
GPE
at
the beginning of this week
DATE
. And I wonder what you make of the
Chinese
NORP
problems as we know there are
three
CARDINAL
or
four
CARDINAL
of them interlocked there. But on the other Is it possible that we'll give a little at least a little relief to the
fed
ORG
here on slowing inflation Probably well it it goes back to the issue we discussed
a few minutes ago David
TIME
about oil prices and grain prices
Main
ORG
impact of
Chinese
NORP
slowing is likely to be on commodity prices and there's a question as to
Rain prices Main impact of
Chinese
NORP
swelling Likely to be How much weight those should be given as we think about our inflation rate in this country but it probably is a positive I think the larger questions involve Responding to these Increasingly profound events in
China
GPE
It was taken as almost axiamatic six Or
a year ago
DATE
that at some point the
Chinese
NORP
economy would surpass the
American
NORP
economy in terms of total GDP at market exchange rates that's now much less clear than it previously was and I think you're seeing all kinds of challenges
Communist
NORP
party involvement in a wider range of enterprises there's the demo
Traffic
ORG
challenge Have been saying for some time That I think people are gonna look back at some of the economic forecasts about
China
GPE
in
2020
DATE
in the same way they looked back
Forecast
PERSON
for
Russia
GPE
that were made in
1960
DATE
or for
Japan
GPE
that were made in
1990
DATE
. Last one here toward
the end of the week
DATE
turkey central bank made a move to try to combat inflation by you won't believe this cutting the interest rate from
14 to 13%
PERCENT
cuz of course it's President
Erdogan
PERSON
's theory of interest rates and in What did you make of that? President
Erdogan
PERSON
is the world's
first
ORDINAL
Modern monetary theorist. He is putting modern monetary theory into effect So far it hasn't worked very well For him Or for the
Turkish
NORP
people I don't think that's going to turn around And I hope that the misguided accolades of modern monetary theory in
the United States
GPE
are watching. Okay Lori thank you so very much that's
Larry Summersville Harvard
PERSON
our very special contributor here on Wall St week. Coming up, we all know getting older makes us slower and grayer but can also make us richer. That's next on Wall St Week on
Bloomberg Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
this group has broken by
Bloomberg
PERSON
's Amanda Crypto You have a world of young people. That want their own financial system And their own culture. And it is very powerful. And I'm a big believer in it. Finally,
one
CARDINAL
more thought. Old.
Finally,
one
CARDINAL
more thought. Getting old.
One
CARDINAL
thing that we all have to do None of us wants to think about it And sometimes seems like some of the oldest among us may be the deepest in denial where there is rock musicians like
Jagger
PERSON
still performing live on stage at
the age of 79
DATE
or sir
Paul McCartney
PERSON
who's still going strong way past that age of 64 he wants worried about or our political leaders Or nearing their
80s
DATE
like President
Biden
PERSON
and
Mitch
PERSON
And
Nancy Pelosi
PERSON
who snapped back at a reporter
10 years ago
DATE
when asked a question. Colleagues privately say that you're just getting to stay on And who can forget President
Ronald Reagan
PERSON
who in
1984
DATE
provoke the age old or should I say old age question after stum Through his previous debate with
democratic
NORP
challenger
Walter Mandale
PERSON
. Only to come back with this zinger. I will not make age an issue of this campaign. I am not going to exploit Political purposes. My opponents, youth, and inexperience. The world of business and finance is an entirely immune from this but by
Warren Buffett
PERSON
who at
91
CARDINAL
shows no signs of stepping down and told our own
David Rubinstein
PERSON
his goal is to keep Who I like to be the oldest man that ever lived actually And who knows maybe Really just get older. We get better. Was hoping that that may just be true. We now have a concrete, provable example, coming from the world of golf, where a journey and tour professional who'd struggle for
years
DATE
, suddenly became a star, simply by turning
50
CARDINAL
Into the older player PGA tour champions league To be sure
Stephen Alka
PERSON
from
New Zealand
GPE
happened to be at the very top of his game when his birthday came around but according to
the Wall St Journal
ORG
adding that extra year has let him In
1 year
DATE
it's $
three
MONEY
.
5 million
CARDINAL
which is more than he made in all the rest of his career put together And if it keeps sinking extra long putts like he did to win the
Boeing
ORG
Classic
PRODUCT
David Weston
PERSON
this is
Bloomberg
PERSON
see you
next week
DATE
. A lot of the satellites have proposal systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines yeah we offer a collision avoidance survey it's a subscription service we'll send you an alert 7 days in advance. Companies have been doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem.
Companies have been doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've installed so much more hardware in the space. You have a big collision it creates a cloudy and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the light period of the collisions going up Hey Hi I'm
Shanali Basic
PERSON
and you're watching the next big risk in
a year
DATE
that was marked by
Russia
GPE
's warn
Ukraine
GPE
soaring inflation around the world and torn supply chains market sea risks everywhere but these
Finance
ORG
are looking further out for the next risks. I think that the promise of the
American
NORP
dream has to be defined Hey And almost no momenta. You're gonna see nation states look internally and make sure that they have the ability To support themselves. Economic growth and to defend the labor force these are the next big risks There are always issues and for me there are
three
CARDINAL
in particular that I'm focused on intermediate and longer term what has to do with our population
More than a century
DATE
one of the pieces of the secret sauce
United States
GPE
growth has been the fact that we've had strong population growth and strong gains in labor force and I'm concerned about that right now The
second
ORDINAL
area that I look at has to do with investment. For
more than 150 years
DATE
,
the United States
GPE
has been one of the global leaders in long term investment both government investment and infrastructure and also corporate investment in private capital. And what we're seeing is Will you fall in short over
the last decade
DATE
or
two
CARDINAL
and we need to be looking at that as well and the
third
ORDINAL
piece that I'm increasingly concerned about has to do with the role of government The economy and let me be very careful in how I express this. I believe in markets. I believe that capitalism has worked well in
the United States
GPE
but not unfettered capitalism. We have benefited from good regulation. It's not always the best but when we try Protect As a nation. We tend to do much better. We look at some areas in which
May
DATE
now be coming under some risk and I think that would actually damage long-term economic growth of
the United States
GPE
. What about the makeup of
the United States
GPE
is creating a more complicated future for In the country. Reasons the
US
GPE
economy has outperformed the economy of other develop nations for
the last 30 or 40 years
DATE
has been that we've had faster late before growth you know it's a very simple arithmetic equation
Workers
ORG
, more GDP. Immigration by the way that's not new this has been a nation of immigrants since it's founding if we're not viewed as welcoming to talent from around the world we'll have a problem going In terms of how long term growth. When we look at the information from individual
Is welcoming to talent from around the world we'll have a problem going forward in terms of how long term growth when we look at the information from individual companies and industries we see that there is a labor shortage at all ends we all know for example that right now one of the reasons behind the In service inflation has to do with an inadequate number of workers at airports In hotels, in restaurants, and so on The area that I spend a lot of my time looking at is the other end as well do we have enough new scientist do we have enough new engineers do we have enough new doctors and the answer is no we don't keep in mind you have to also create a pipeline Right? The students who are now K through
12
CARDINAL
are the future pipeline of scientist and engineers and doctors and we're not doing a very good job with them right now. In terms of their skills. Is this all kind of boiled down to Erosion of the promise of the
American
NORP
dream. I think that the promise of the
American
NORP
dream has to be defined and that is Every generation doing better than the previous generation. Do they have the To do better than their parents did And what we have seen over
the last 30 years
DATE
or so maybe
40
DATE
is that median household income in
the United States
GPE
adjusted for inflation has not risen but that is a problem I think it creates a sense of political discord it creates a sense of unease People in
the United States
GPE
, and it is worrisome. Because we have to think about how do we get out of this? Well,
one
CARDINAL
way we get out of it To In on the industries that we think can create jobs that can create good paying jobs and and to protect our workers in that way the long term problem is staying ahead of the curve making sure that the industries that you're supporting Meeting jobs and those jobs are paying well enough so that individuals and households feel that they are moving forward. Give me a comment earlier about how investment in
American
NORP
infrastructure was one of the things that you were worried about. Is this the biggest area of investment that you are concerned about Many economists myself included believe that the so-called golden era of the
1950
DATE
's,
1960
DATE
's, economy of
the United States
GPE
was linked to our willingness to invest heavily in the future and it wasn't just the government it was also corporations willing to do that. So as a percentage of GD We were dramatically above every other nation. We were number one in that category for
century
DATE
. We no longer are part of that is because we are under performing our own Commitment to this area but also other nations have figured it out. In
the 21st century
DATE
, the winning economies, the winning strategies for economic growth, and therefore, enhancing the well being of your people. We'll depend upon whether you're investing. The reality is we just have not And peace with inflation and so if you think about the ability The average
American
NORP
to earn a living How does that kind of play into this longer term concern you have about
the next 10 years
DATE
not being as good as the last
10
CARDINAL
especially when Under a higher interest rate regime. Gross Long-term prosperity. I'm not talking about stock market prosperity. I'm talking about the prosperity of the people in the nation is very much tied to the health of the middle class and obviously to weather the wage in the incoming increases for those families are adequate. And Is something that has been a problem now for
40 years
DATE
in
the United States
GPE
where the median household income hasn't kept up So, this is not a new problem. I think what has happened is that this rising inflation has kind of pulled apart the
Old income hasn't kept up. So, this is not a new problem. I think what has happened is that this rising inflation has kind of pulled apart the curtains and now we see much more clearly where these problems are and where the issues are. I for one, I'm happy to see that wages are now
Saying
LOC
. I'm happy to see that workers have more flexibility in how they wanna conduct themselves and so on. I think that's that's a good start. It's not the end. Solution. We need to recognize that a
40 year
DATE
problem is not gonna be corrected In
4 months
DATE
it's gonna take longer. The balls get to a place where outbreaks don't become pandemics in the
first
ORDINAL
place. No one covers the world like
Bloomberg
PERSON
. In
the coming months
DATE
do you see that coming We will not just cut and run The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or robot Whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination for the
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? When you look over
the next 5 to 10 years
DATE
over a little bit of a longer time horizon and you think about what's happening in the economy and markets in society more largely
Keeps
PRODUCT
you up at
night
TIME
.
One
CARDINAL
thing that has, you know, I see in particularly important to me is how we handle future pandemic. I, you know, we we shared with COVID that we were not ready. For global pandemic and I think we are still not ready for the next one. The really worrying cases is that we have a repeat of what happened with COVID, We are not prepared at all beforehand by depth spreading too much of the world but with a way higher fatality rate and ends up killing a lot of people the economy grinds to halt on
midday
TIME
the chaos and lockdowns you know is there if it works stream version of what we saw during COVID is part of your worry here that the next pandemic would be worse than what we saw in COVID And worry that underpins that the systems we have are not prepared for it. Clear to see in retrospect that we were not ready for COVID there was no coordination in terms of what responses should be to it instead we saw serve like completely discordated action if you look at where we are
today
DATE
we have not started putting any of those processes in place that we should have had last time if you know we got a And there was a future pandemic that was substantially more fatal. You could imagine the same thing playing out but with a lot more devastation Warrant that many lessons that it seems like we really learned as a society that we are in much the same place we were beforehand there's almost no discourse about a future pandemic and
That many lessons that it seems like we really learned as a society that we are in much the same place we were beforehand. There's almost no discourse about a future pandemic and almost no momentum. We don't seem to learn really the chore lesson Which was that we were not prepared And that we need to be better prepared. What kind of strains do you think this is going to put on an economic system in the future? I think that you played out pretty poorly this time when all of a sudden done and I think at the very least you could see a repeat of that where not only did we have massive supply kid problems that were now seeing in retrospect We had massive monetary supply increased trying mask over Some of the problems What would have been it probably a devastating economic hit otherwise as COVID winds down and are I economic I I monetary countermeasures wind down it becomes clear we never really averted economic impact from It's had massive negative impact. You can look at runaway inflation. You can look at rising interest rates. A slumping economy, slumping markets, and and and that was without, you know, nearly just as they're put it in right here, future one that that does much more damage and we might not be able to get back Or as functionally About in terms of inequality obviously different Were impacted differently both within the
US
GPE
and across the world. So, do you worry about the compounding effect when it comes to, you know, the social strata? Because of the global nature of pandemics. If there is an outbreak in
one
CARDINAL
country that is going to affect every country And and and so not only do you see disproportionate dust in less while off countries but that also makes it really hard for the world to stop this spread of pandemics and that means that if there are Countries that aren't being given
first
ORDINAL
class access. They countermeasures. They will be able to also act as a petry dish. Or I your bugs do just spread it and grow. When all is said and done you know we will have spent Hens of
trillions of dollars
MONEY
as a world. Trying to contend with the fallout. From COVID, that is a really huge expense. And we're still not done with it. It's a little bit sobering to see the scale of impact of that new combined with the game with dislike. Not even solving the problem and that's with the workforce that is able to mostly go back to work in person if you have a more deadly strain there's gonna be a lot more worry about getting back to work and you could see much more protracted productivity declines that sort of Incinerated in the
first
ORDINAL
place. The strain on political systems. You saw kind of the masking issue and the lockdowns becoming a really big contention point politically in many governments across the
US
GPE
and the world. How do you expect that to create a further strain on the system Politically it put a lot of political On on on You know a pandemic from getting out of control in the
first
ORDINAL
place. You know cut it off way closer to the source. That means instead of arguing about masks you know we should have been focusing on how can we get in place You know good ventilation in indoor buildings So that there is massively less spread of pandemics through them that would have been a much much healthier You know focus process as a society is there a bipartisan solution and are there ways that you personally are kind of incorporating this into your own work I know you've been rising more and more both as a philanthropist and as a political donor how are you thinking about this risk in terms of how you work ahead this isn't a
one
CARDINAL
party against another Everything I in the way that some debates over some specific
Techniques
ORG
ended up being I have been spending a fair bit of effort and and and time and in capital on trying to advance you know pandemic prevention I I you know legislation and in policy a lot of the discourse around you know COVID and pandemics in general has you know as you serve you know reference Hey portal.
You know, legislation and and policy, a lot of the discourse around, you know, COVID and pandemics in general has, you know, as you serve, you know, reference, focused on things like masks by the time that's the debate. We've already failed. At the much more important goal. Which is avoiding ending up there in the first Ventilation and buildings the goals to get through place where outreach don't become pandemics in the
first
ORDINAL
place and where we don't have to shut down you know the economy where people don't have to die where we don't have to make trade offs and hopefully we can I think spends, you know,
tens of billions of dollars
MONEY
To save
tens of trillions of dollars
MONEY
later on. There is a possibility I think this leads to revolution in populations that do not have control over their
Energy
ORG
. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Tag on the product may read made in the
USA
GPE
but
Often
PERSON
says made in
India
GPE
.
Alphabet sun
PERSON
dart patch eye
Microsoft
ORG
Sacha
Nadella IBM's
ORG
Arvin Krishna
PERSON
micron technology
Sanjay Mehotra
PERSON
and that's
Gap VM
ORG
ware and that Count
Indians
NORP
running companies all over the world. Why have so many
Indians
NORP
risen to the top? Competitive education system. If you can survive the pressure it takes to get into one of the
Indian
NORP
institutes of technology. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile, the belief in
India
GPE
's ability to produce so many tech wizards is reinforced
every year
DATE
.
Indians
NORP
make up Reforce of the immigrants receiving coveted HoneB visas for the
US
GPE
. And it's a So
Ken
PERSON
, when you think about
the next 5 to 10 years
DATE
, what worries you most? Of us right now is is I think
De Globalization
PERSON
you're gonna see an Nation states look internally and make sure that they have the ability To support themselves. How much of this is a function of the war in
Ukraine
GPE
and how much of this deglobilization phenomenon started before that? Well, I think it did start before. All you have to do is look at
Brexit
PERSON
. I mean, the idea for
Brexit
PERSON
started. I think it's now
7 or 8 years ago
DATE
It didn't happen until
2020
DATE
but that's the beginning Think what you see in the war finale is let's just take an Up an exampleary Figure in this
Germany
GPE
So
Germany
GPE
strategy up to this point was the outsource their To
the United States
GPE
to outsource their financial management to the
EU
ORG
. They outsource their energy supply to
Russia
GPE
And the answer is they're in market to
China
GPE
. This was the complete globalization of an economy and you can see at this point, I think they're in extreme trouble. So, if you think that deglobalization is the next big risk, what's at stake from countries detaching themselves from each other? What really is the problem Happening. We were able to outsource to the cheapest labor markets. We were able to rely on each other for goods that that really throughout history and I I do think part of this is going back and reading history. Most countries would not outsource items that were Important to their well being food being one of them and I think energy being one that's showing up is to be extremely important What's gonna happen now is i think each society is gonna have to think about did I did i outsource something that That I'm not comfortable with. How was this even possible to fully become deglobalized when so many nations were a lie? Another is it's not that every nation is rich with oil or rich with a nickname.
How was the
seven
CARDINAL
possible to fully become the globalized when so many nations rely on others it's not that every nation is rich with oil or rich with nickel or rich with food resources events for those of us in
the United States
GPE
we have a spectacular Country filled with the resources. We need
Germany
GPE
has gotten itself in a position where it does not have energy supplies. It turned off it's nuclear. It's right at the center and near the war and and the ramifications. We're seeing the elements of deglobalization and it's cost. To ordinary people elaborate on that you should cause to ordinary people what are the costs how else are you seeing a play out throughout history food is always been a key and if you look at what's happening In
the Russia
GPE
Ukraine
GPE
war I think there's more going on there in terms of supplies, supply chains, Horrified by the war and the invasion but i think the The motivations and the and the rational and what's happening behind it are gonna highlight to people. Can I provide the basics? Each country will move to protect their own citizens. And as a result, they might deglobilize ahead of you. There are populations all over the world that we're not aware of but they wanna eat. And they Be heated in the winter and by the way, they want access to cheap electricity. And all these things are going through the roof until the extent We're feeling the political pain in the
US
GPE
and I I believe we'll solve this problem. It it might take
a couple of years
DATE
but it'll work its way out. Not everybody has that choice. Much of the rest of the world has depended on flows of of those Food cuz I mean we're talking about part of
Africa
LOC
that is totally reliant on the
Ukrainian
NORP
Weedfields and
Russia
GPE
was a gigantic exporter of wheat this is the basic food ingredients that keeps people from Rioting from from having insurrection. We saw it again in
Sri Lanka
GPE
over
the weekend
DATE
. You're
nine
CARDINAL
meals away from having a very unhappy citizenship that's willing to to take extraordinary action to get their family safe. There are, you know, seven 1 billion people in the world. I'd say a one 1 billion of them wanna say roughly or in
Western Europe
LOC
and the And we've set in course a policies Very much focused to a society that has reached middle class. I'm not saying everybody but you know, the vast amount of society is very interested in things that
six 1 billion
QUANTITY
people Two 1 billion in subsaver in
Africa
LOC
During
Asia
LOC
are still trying to reach middle class We raise their energy costs dramatically I don't think they're gonna be you know they're not gonna be happy about that and I I think the Arab
Spring
DATE
fundamentally started over food prices and their basic instinct in need is to feed heat cloth and take care of their family. So what are the forces that are reversing
decades
DATE
of globalization Well, it might be just the safety of these supply chains and possibly the actions by
Russia
GPE
are a highlight to that but again, go back to
Brexit
PERSON
decision By the
UK
GPE
people Vote to take back some of there also they had outsourced their labor forced to central
Europe
LOC
and they had started to make a decision to pull it back for whatever reasons they didn't like outsourcing again outsourcing your financial management To the
EU
ORG
and the
ECB
ORG
. You mentioned the outsourcing of financial assets. On
one
CARDINAL
hand I'm wondering what impact do the sanctions have. Some of our policy moves here are gonna have very long term ramifications. In this environment, we've frozen the bank reserves of
Russian
NORP
bank And if you don't think that every single Maybe not every single but there's substantial number
Finance
ORG
ministers around the world have to rethink Where are there as had secure I've had many people ask me What do I do if my assets in
China
GPE
What do I do with my assets in
Hong Kong
GPE
? There's a lot of there's a lot of western investment in
Hong Kong
GPE
residual. Happens if we end up in a similar disagreement or conflict are those assets subject to immediate unbanded
Hong Kong
GPE
residual
Happens
PERSON
if we end up in a similar disagreement or conflict are those assets subject to immediate abandonment. These are questions everybody's gonna ask whether they talk about them a lot or not. They're gonna be asked I'm not saying we'll go to
100%
PERCENT
investment in your own country but boy the risk
Premium
GPE
has significantly gone up. I mean, is this just a giant politicalization of assets around the world? As you see it, given that now, governments are getting involved in a much more Way in terms of the resources that they own oversee and trade. Companies. We've had to abandon assets immediately because of a political because of a conflict. So now you have to anticipate where in the world might we not like the activities of a future You can come up with a long list of where you might be uncomfortable and you have to truly change your your risk profile there. So, we're in the middle of seeing a very effective use. Weaponization of resources now not everybody can weaponize the resources because they don't have They don't have enough resources. So, to the extent that this is the biggest risk you see on the horizon over the the medium to long term. What about it really keeps you up at
night
TIME
? There is a possibility I think this leads to revolution in populations that do not have control over there food and energy and in a world that we live in, like it or The the change in the world toward cheap energy
Cars
ORG
oil and gas is used for clothing. It's used for significant amount of products. And again, food is food and I get concerned as to what can happen in these these If if oil and gas does get to be $
200
MONEY
a barrel And if The supply, the actual food supply gets disintermediated. I think you could have ramifications. We haven't, we haven't seen. Now, I'm not I'm I'm pretty bullish on the world so I think people figure these things out but I I think the quicker The world focuses on it and and admits that they have to supply and be independent of global trade in its best way they can the better for their populations. People ask me all the time what is the key to being a really good investor? I tell them it's the surround yourself with and work with the best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest investors in the world. The people that I would like to have That the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Need to catch up. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio When you think of cutting edge technology at sea you might be thinking of stuff like this But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. I'm from shipping.
About three% of all the world is huge information
Three% Vinot
GPE
sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option what about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? So, this is a lab. Of flex line where they come in first it's just the body that's what I call it the body of the vehicle and then that's a pieces that have to be assembled put together tested now I'm told you're not building a quote unquote car no I'm not Don't say the word. It's a vehicle. Huh. Yeah. A transportation vehicle. We'll sell you a ride in this vehicle. Can we get in? Of course you can. Alright. There it is. Okay. So comfortable. That's what we want. We don't want you to think about driving. This is why it's not a car. On the
Zukes
PERSON
factory floor CEO
Aisha Evans
PERSON
. Where she says they're not building a car but transforming ride hailing as we know it. She went from
Senegal
GPE
to
Silicon Valley
LOC
chasing a career in technology where she could have a global impact after
12 years
DATE
as a top ranking executive intel
Aisha Evans
PERSON
took a leap into the startup world joining
Zeke
ORG
's which probably got bought by
Amazon
ORG
$
One
MONEY
.
2 billion
CARDINAL
. Joins us now for a look at the road ahead on
Bloomberg Studio
PERSON
100
CARDINAL
. Aisha. So great to be here with you. Thank you for coming and thank you for having me. You came to zooks as CEO in
2019
DATE
over from
Intel
ORG
and
just a year later
DATE
you sold it to
Amazon
ORG
. How did that happen so quickly? It was a journey It takes a lot of capital to take this endeavor all the way it's it's a worthy one When we looked at the ecosystem, when we looked at everything that was going around, we had to decide whether to stay private or whether to get a long term oriented partner. Like some of our fellow travelers Than the pandemic hit that brought a lot of clarity shall we say and so the opportunity presented itself and we we went for it why is
Amazon
ORG
the right fit?
First
ORDINAL
of all, there are great company. They have created both organal and adjacent multibillion dollar There are long term i entered Very purpose driven so That matched our ambitions. There's never owned a car Yeah but we're not a car company. Exactly We're a rave healing company Talk to me a little bit about how you got to silicon ballet. Your story is not the story of a typical TexEO like Jeff Bezos or
Andy Jassie
PERSON
. Tell us about your upbringing. I was born in
Senegal West Africa
LOC
My parents, I thank them to
this day
DATE
. Sort of need school, an implicit expectation, it was an Discussion. Very early on. I showed an attitude and interest. In math, physics, not so much in biology, and in building things, and so they cultivated that and then I bounced back between
Paris
GPE
and and
Senegal
GPE
. Learned a lot about what technology does to people Lives and what it makes possible. I literally had a contrast every few months and so computers were coming online. Not the internet but the what Internet was going to make possible was also coming online the
US
GPE
was to the place to be To study that then basically got jobs in the industry and eventually ended up at
Intel
ORG
in in
Portland
GPE
through that started into facing with silicon valley and then zoos came along. I heard a story about you had take a phone Talk to your friends long distance Really happen.
Started interfacing with silicon
Valley
LOC
and then zooks came along. I heard a story about you hacking a phone in order to talk to your friends long distance. Did that really happen? Oh yeah, it did. I always had a double life a little bit in terms of family, friends in different ecosystems. I still do to this guy. And so back then it was landlines It was expensive. It was. My dad isn't was in telecommunication. So, if he was not confused. So, we had a rotary phone. I'm dating myself and he locked it. But obviously, I figured out how to still make the phone call Who are your role models back then? I mean, it's so hard for young people, especially young girls to see themselves in the tech industry
Mary Curry
PERSON
Was and still is a role model. In
France
GPE
you study philosophy and a lot of the philosophers are also mathematicians So they were role model and they also forced you to think To chief strategy officer at
Intel
ORG
And it was a difficult time for
Intel
ORG
.
Intel
ORG
was kind of losing. Way. What was it like working there at that time? It was a difficult time in the sense that anytime you're successful, you earn the opportunity to talk about what's the next phase of the journey and I was in the middle of that. But it was also fun. I learned a lot. What was it like going from an established brand name
Tech
ORG
company like
Intel
ORG
to a startup like
Zukes
PERSON
I assume there are major differences in culture and execution there. It was quite an awakening. So I didn't tell I was a little bit known as not a rebel but somebody who questioned things and who maybe did the normal. Oh my gosh. You know it was too slow or is this or that or the other. And add your Imaginator. Alright when I arrived at zoo yes it was fast it was we were making decisions quickly but from an infrastruct Standpoint with I was like whoa There's a reason for infrastructure and so but I embrace the journey and said okay we have One. When you're doing what we're doing it's not just about the technology. You have to think about the steps to getting to market. You also have to think about building the company. That it's ready when you scale if you wait until you need to scale to actually build the infrastructure bad things happen. What's it like being leading black female executive In such a white male It depends. I don't wake up in the morning thinking I'm that I wake up in the morning thinking I'm Aisha. I've got stuff to do. Meetings, decisions to make Kids to take care of Obviously in the moment sometimes I think about it because you look around but I I try and turn it A into an opportunity because and that's just how I I have one ones with myself and how you think about it and how you show up is important. So I try and tell myself that means that I'm bringing a perspective that nobody else has. And that's additive And I try and also figure out a way to have what I call an inclusive environment where I see people's point of view and they see mine and I try not to get angry When it manifest itself in annoying ways. What are the obstacles that you've overcome To get here I think that often people assume both an agenda and sort of ethnicity standpoint that it's not normal to be here and therefore maybe you got a discount When it's often the opposite You have to try much harder than than others. I've had to work on
Sort
PERSON
of how I receive information when or how I I deal with behaviors that I'm not acceptable And sort of learn when you take the high roads. I've had to find my voice and not be afraid of it and use it. Are you pleased with the change you've seen or has it not changed fast enough? I can't be pleased. I mean, I I'm pleased that there is change but absolutely not. We have to do a lot more as an industry. Why isn't it changing faster? Why don't we see Want people like you in positions of power. Well, I think that's a complicated answer. I think it starts very
Or as an industry. Why isn't it changing faster? Why don't we see Want people like you in positions of power Well, I think that's a complicated answer. I think it starts very early on. I have a son who participates in
Lego Robotics
LOC
and we had some observations and kids are what seven, eight, and you already see differences I think also from a social standpoint, around middle school, when there's a transition, for girls, maybe having a support system to stay in math, dentist defying it, teaching it differently, and then as people come up the ranks, making sure, especially for women, making sure that we have a System around them so they can traverse through some of the some of the phases like for example marriage and childbirth and so on You're building a ride hailing service not a car why is it important to have a woman in the room People of different races in the room. I'll give you a story. We were discussing pick up and drop off And I'm the only woman in the room. Yes, I'm always in jeans, and what have you but occasionally, I dress up and have high heels on. We're wearing high heels
today
DATE
. Yep, I made a comment. Right? And so, I was like, okay, we have to think about it from that standpoint, because if we're giving right to customers in
San Francisco
GPE
for example, on a
Friday
DATE
evening
TIME
, on a
Saturday
DATE
evening
TIME
, maybe some folks have heals on, and maybe we need to think about the pick up rages. Because expecting them to go uphills in you know high heels probably not a good idea. Our Tesla and
Elon Musk
PERSON
competition This is silicon valley. We you know pay tribute to disruptors. Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs cure. As universally important to human life as sleep Surrounding it's necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happened there can be harnessed to further expand our It's easy to memorize that makes you smart. It can spit back a lot of back. But if you wanna be wise, if you really want wisdom, you gotta know when and how and why to use that information. And that's what you bring figures out while you're sleeping. Do you see that coming
24 hours
TIME
a day.
Bloomberg
PERSON
. Let's talk about the competition what is
Zuke
PERSON
's edge over
GM
ORG
's cruise googles I look at them a little bit like fellow travelers. Competitors because we're in the same space and we're going after some of the same things but this is a big industry It's not gonna be a winner take off
second
ORDINAL
it's The critical Lay that groundwork. Now, having said that, I would say one of the big differences is that we are going straight to what we think is the ideal product To provide rides to customers. We are not here to enhance your driving experience. We don't even want you to think about driving. So the customer experience is built in such a way that you're here to be transported. You have an app which you already know how to do
today
DATE
. You have an app where you say I wanna go from point A to point B especially in dance An environment think downtown
Cisco
GPE
. And we'll pick you up. Sliding doors. You step in a little bit longer.
Urban environments think downtown
San Francisco
GPE
And we sure and we'll pick you up. Sliding doors. You step in. A little bit
London
GPE
carb We don't To taking a car that was architected For human driver and then adding sensors and computer to it in order to make it fully autonomous What about Tesla which is right down the street Our Tesla and
Elon Musk
PERSON
competition Fellow travelers this is silicon valley we are you know paid tribute to disruptors having said that we're not exactly in the same business we don't sell a car to people we sell a ride to people our customers are not drivers they're riders and therefore we use the same types of technologies but they are in the car selling business How does
Fit
PRODUCT
into the future of
Amazon
ORG
. Well, that story is yet to be written.
First
ORDINAL
of all, we we hope to deliver on the promise of a new segment
Sort
PERSON
of a big business and the one of those in the tradition of of
Amazon
ORG
. We know there's a world of possibilities but I tell everybody we first have to earn it, right? Before we talk about sort of synergies and possibilities and opportunities together. Oh times anything is still oh and it will be for a long time. We're focusing on building our business, getting to market, and then there's a
10 1000
CARDINAL
of possibilities We could do together. Is
Zuke
PERSON
's gonna be dropping off my boxes Is that what I should expect? If that's the right thing to do and if it makes sense to do so but first we're gonna make sure to take you everywhere you need to go without having to worry about parking, having a car, and so on. What's it like having amazon as your boss It's been good. We're an independent subsidiary. Of of
Amazon
ORG
. So yes they are involved. We agree on what's gonna happen, why it's gonna happen. How often did you talk to
Jeff Bezos
PERSON
or do you talk to
Andy
PERSON
Or maybe it's
Dave Limp
PERSON
Don't talk to them that often. I mean, we have
monthly
DATE
business review or
quarterly
DATE
business review. But no, it's not like I'm besties with them and we're on the phone and wrapping and chatting now. Well, you must know what their expect What is amazon expecting of zooks? Execute, get to market, scale. And do you have the funding to do that?
GM
ORG
, Very well funded competitors or fellow travelers as you say. Are you getting what you need? Yes, more than what I need. Funding is not something I even worry about. So what's it like to operate in that environment? Where money is not an issue? Well, I mean, you have to be careful, right? Because you also don't want to be a drunken sailor and be like, oh, now I have, you still have to be a very disciplined. You have to manage the phases of the business. Well, like, okay, how do we exec How do we make our mouthstones? How do we get to market? Where things organize properly? How do we hire? How do we retain? And so on and so forth. How do we stay mission driven? The public seems to have lost interest in waiting around for self-driving cars. I rode in google Driving car in
2011
DATE
. Wow. And I'm still waiting Will to buy or just ride a self-driving car on demand. Why is it taking so long? I think in self-driving.
First
ORDINAL
of all, the opportunity is so clear. The beach is so broad. We forgot that big things do start small.
One
CARDINAL
second
ORDINAL
it's a hard problem to solve we talk a lot about safety And we talked a lot about human era when it comes to driving. But we also forget that collectively at least in
the United States of America
GPE
. Humans collectively drive
100 1 million
QUANTITY
mi. Before Having a fatality. Lot of miles. So humans are also pretty good. And the thing humans are good at. Which is hand iconic exception handling. We all know how to drive. If you were all fully autonomous, would be deployed already but we're driving amongst human and you have to deal with so many little scenarios. There are so many things that you've been learning about driving since birth. And codifying that using AI sensors and and computers is turning out to be a lot harder. Last but Please it's a safety critical system none of us. Should deploy Until an unless we have clothes loop evidence that were safe. So what is the
AI
ORG
?
Please it's a safety critical system none of us. Should deploy Until an unless we have clothes loop evidence that were safe So what is the A I need to learn how to do Point. What are the challenges left to solve? It needs to know how to deal with unexpected things. I say as they happen. And is that possible? Can I AI learn that? Of course it's possible. I mean I'm one of I'm an optimist when it comes to technology. I started in wireless. So you have to think from Switchboards all the way to
today
DATE
. Quite a journey. I'm fascinated by flying. Airplanes. The right brothers if Trying to solve what he's being solved in aviation
today
DATE
. They wouldn't have tried. We we just had let it marinate. Let it take its time. The algorithms will get better. Compute gets better all the time. Sensors get better all the time. It will happen. What about security challenges? We've reported on how Tesla Have been hacked. So you have to design security in your into your products from the beginning. And for us we look at all the scenarios Of what could happen from the security standpoint. Now, these these robots or these robot taxes are also recording all the time. So, they sort of know what's happening inside of them and around them so that gives us a little bit of an edge and then you look at access This is something you just have to pay attention to understand what's going on in that world and make sure that you design against it. What does
Aisha Evans
PERSON
see as the future of
Zuke
ORG
's do you see a global Or do you see something more modest However you get your Welcome to Deborah Hey Facebook Hey Spencer We're going to step by step electrify everything and what does that mean?
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions. What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. How many rides have you taken? Actually, it's such fair, right? I take a lot of riots. Both in our L three testing fleet. As well as in the ground up robot taxi. So, when you take a ride, what's your report like generally afterwards? Well, okay. So,
Two
CARDINAL
different things on the test fit because and this is a big difference between us and our fellow travelers. I mean our L three fleet the
Toyota
ORG
Highlanders that are outfitted with the same centre architecture placement and compute. There are purely engineering past vehicles. So when I it's called drive review. When I take a ride it With understanding what progress we're making what issues were still having I'm fascinated by the scenarios we can't handle how fast was tele ops able to step in and so on and so forth so then I have a long report And the app and this and that. When it's I'm in the robot taxi. It's more like I'm excited. I'm usually giggling. And then after after
5 minutes
TIME
I'm bored. And I'm on my device. Which is what you How is your navigating supply chain challenges The chip crisis impacted you? Yes, it has. It's impacted everybody. Look,
first
ORDINAL
of all, some things are just more expensive than they should be
Second
ORDINAL
but you accept that it's the same for everybody. You have to get a lot more
Acted everybody. Look,
first
ORDINAL
of all, some things aren't just more expensive, then they should be
Second
ORDINAL
but you accept that. It's the same for everybody. You have to get a lot more crisp around your needs because lead times are longer. And that's really when it pays off to have had a good relationship with your suppliers and treated them as partners so you can talk about your problem statement and arrive to solutions but it hasn't like slowed us down. It's just been an extra Vector to manage. Uber and Lyft seem like they would be obvious partner Have you talked to them We in this industry there are no secrets and we're all friends. We all talk to each other. At some level or another. So yes, we all have doctor each other. Can you imagine would be your
first
ORDINAL
customers Well,
first
ORDINAL
of all,
Las Vegas
GPE
, we've been public that that's our our
first
ORDINAL
lounge. I call it sort of affectionately. A
one
CARDINAL
street dance urban environment. How's that? With a lot of demand. And then we really think that in starting at least at the beginning big cities that have a very dance Or urban sort of landscape where people are going to work, people are going to museums, people are going to restaurants, they don't wanna worry about parking, we think that would be the
first
ORDINAL
customer. So, commercialization is on the horizon in
Las Vegas
GPE
and also
San Francisco
GPE
. That would be next. How do you stay motivated on that To commercialization. Given that there are still, as you say, these hard problems to solve Cuz every day literally Either Something happens in terms of progress And it's really important to not just look at the ultimate success but I call it like kind of a long the way the little celebration I mean even when I do drive with you yes I have a long list or you know oh what about this what about that But the vehicle will do something new or something awesome and you're like, oh my gosh, you go awesome. So, they are so many things that happen on a
daily
DATE
basis,
weekly
DATE
basis that you see advancement. I I talk it's Climbing, right? You get to assert an element or a certain place. You appreciate the journey. You turn around. You look down. You see what you've done and you're like, alright. Let's go for
the next week
DATE
. So, as you put points on the board, what does
Aisha Evans
PERSON
As the future of
Zuke
ORG
's do you see a global Or do you see something more modest I see I want I hope to lay the foundation for a global mobility giant. We talked about human being need transportation It opens up access to
Mobility
PERSON
, it opens up access to knowledge. It opens up access to inclusion, Not to mention safety the environment and frankly humans were just too valuable to spend also
400 1 billion hours
QUANTITY
worldwide driving and we think that this is at the center of that puzz So that is the goal
Alright
PRODUCT
. So, we're gonna do, this is a little rapid fire section now. So, just quick answers. What is
Zuke
PERSON
stand for? The word
Zukes
PERSON
is a basically a marine sort of species that is solar powered and self moving in the ocean.
Interesting
GPE
. Piece of advice for your 20s. Take a chill pill it'll be okay What about your 40s Enjoy the journey you've made it Are you under restaurant at some point? Is that true? I confuse the love of cooking and running a restaurant What's your favorite thing to cook? Which is a good dish. Biggest guilty pleasure Trashy books. What box? What's your favorite travel destination? Me too, which island.
Hawaii
GPE
. I'm from
Hawaii
GPE
Kawhi all the way last TV show you've been I'm in the middle of a
Bridgeton
GPE
. Your view on work life integ I don't use the word balance. Work life choices, setting expectations on all sides. They are everything. They are the beginning and the end Our driverless future is always right around the corner or
10 years
DATE
away. Give us
Are everything. They are the beginning and the end. Our driver is future is always right around
Corner
LOC
or
10 years
DATE
away give us a realistic
Online
PRODUCT
. When can we ride in the zoo? A lot of people ask me when can I tell my kids they can't have a they shouldn't get a driver's license. And I think it's gonna be probably my kids' kids. Arguments
four
CARDINAL
and against going public Against definitely focus
Quality
ORG
pressure is something I understand and know and this is a long term journey. So, focus is important. It seems to be everybody's dream in this valley. Is it yours No no my my dream is to to get this this robot taxi out there and to see it deliver the promise that I know it well Gonna be on public roads
this year
DATE
. Know we'll have to see What
about 10 years
DATE
? What is success look like for zooks in
10 years
DATE
? Several cities Then I say hey I'm gonna zooks my way over there To Evans. Thank you so much for joining us. Great to have you. My pleasure. I appreciate you coming over. Hear from leading economists. Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars BSO now is your online home for
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performances see new concerts that go behind the scenes plus acclaimed archival concerts visit
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ORG
systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver their machines yeah we offer a collision avoidance it's a subscription service we'll send you an alert
up to 7 days
DATE
in advance if your satellite's gonna come Dangerously close to a piece of debris or another satellite. Companies have been doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. So much more hardware in the space. You have a big collision it creates a clouded debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites in space the risks of the collision the likelihood of the collisions going up
This is my kitchen table and also my filing system. Over much of
the past three decades
DATE
I've been in investor the highest falling of mankind I've often thought was private equity Hey Hey Facebook make it to the top. Negotiate with him I did no due diligence For
the past several decades
DATE
,
Andrew Livers
PERSON
has been one of the most important figures in
American
NORP
business. For
14 years
DATE
, he served as a CEO of Dall transforming that company from a chemical manufacturing company to
one
CARDINAL
led by science and innovation. Currently,
Andrew Livers
PERSON
is involved in a number of business endeavors including He also serves as an adviser that
Saudi
NORP
sovereign wealth fund I sat down with Andrew recently and loosen showroom in
New York
GPE
to discuss his accomplishments and his future ambitions. So I've interviewed many business people on the show but very rarely about interviewing anybody who has any interest in so many different continents. So, you're doing something in
Saudi Arabia
GPE
, we'll talk about that. You're involved in things in
Europe
LOC
. In
Australia
GPE
, your native
Australia
GPE
, you are now the head of the Olympic committee. Is that right for the next
Olympics
EVENT
in
Australia
GPE
? It's a 2032 Brisbane Olympics. They won the bid
last year
DATE
and on the president of that to put it in place and 2032 as you know is
10 years
DATE
so that's an exciting project. And
the United States
GPE
you were for Sometime more than a decade the CEO of Dall chemical initially that were called down and you merged it with
Dupont
ORG
before you step down is that right correct so let's go back to your beginning you grow up in
Australia
GPE
How did you manage to get to Dao and to
the United States
GPE
? Yeah the the gene that got me to have wanderlust was because I grew up in a little multicultural town in
Northern Australia
LOC
called
Darwin
PERSON
lots of
Asians
NORP
lots of indigenous people first Nations people lots of immigrants like
Greeks
PERSON
that came from these Very poor areas so I I had this desire to go see where they were from and The places north of us
Indonesia
GPE
,
China
GPE
,
Asian
NORP
, as a whole. The
American
NORP
You know, if you like knowledge that I got was listening over the radio to, you know, things like the JFK, Assassination, and man on the moon, in, you know, I we didn't have TV where I grew up. So, I was just fascinated by
America
GPE
and what it offered the world. So, that combination got me recruited out of I didn't join a
British
NORP
company. I didn't join an
Australian
NORP
company. The companies that came by that were
American
NORP
were the ones that I was intrigued by and the best recruiting line of them all for a
21 year old
DATE
. Join us and we'll show you the world. So that com Where I grew up what I was exposed to and the Dow recruiting line. Family a wealthy family Blue colors we would call them immigrants my father we lost our grandparents he he lost his parents and so he raised his
two
CARDINAL
younger brothers when he was
12
DATE
he became an apprentice and a carpenter and he and his
two
CARDINAL
brothers
Order
PRODUCT
small fledging building business in
Darwin
PERSON
and we I was supposed to go to university in my family. Do you graduate university and go to work a dowel and in
Hong Kong
GPE
initially? It would be they send me down to a very cold part of
Australia
GPE
called
Melbourne
GPE
which haven't have a lot of great people. I got cold redefined when I went to
Michigan
GPE
But I thought it was cold at the time. They went I went there for
6 months
DATE
and there was an accident in a factory in
Hong Kong
GPE
. And they sent
four
CARDINAL
straight in engineers. I was one of them to go work to actually help the locals adjust to operating a complex chemical environment. There's a now is a very famous chemical company was for quite some time. How do you go from
Hong Kong
GPE
Australian
NORP
accent to an
American
NORP
company in the middle of
the United States
GPE
. The visionaries that ran down
the 60s
DATE
that led to my recruitment in the 78
With this
Australian
NORP
accent to an
American
NORP
company in the middle of
the United States
GPE
. The visionaries that ran down
the 60s
DATE
that led to my recruitment in
the 70s
DATE
. Had this view that to go into national yet to high local. Well before it was Vogue and they went around the world looking for people who were willing to go
Hong Kong
GPE
at that time wasn't the sophisticated city that it is today Basically, you know, what they did was they localized and grew talent locally but kept a playbook. So, I was spotted early by the then dial leaders and they started to move me around to test me in different places. And then eventually to the
US
GPE
. Engineer, what was your skill set? Chemical engineering which you know, when I look at
today
DATE
's world and I think about chemical engineering, the word chemical sort of sort of puts you into a different place with a thought. It's really problem solving engineering. Learn how to be a problem solver by learning chemical engineering. So, you've actually moved to
Dow
ORG
headquarters where is it's in
Michigan
GPE
, right? But what what's small city is it? Little town called
Midland
GPE
with a founder, founder of the company, and we're still headquartered there. Alright, so you move there and and for how many years were you to see y'all? So, just share
15
CARDINAL
. Of The last couple were in the merged entity which my successor then we've set up the demojo and we can talk about that if you like but certainly
the 15 years
DATE
included
the last two
DATE
as executive chairman of the Dow Dupont entity but I let us into the merger
Restaurant
ORG
are behind that. Was a
10 year
DATE
remake. We put a strategy in place in
oh five
DATE
. And we execute it over
10 years
DATE
to move us back to an innovation centric company. We had lost our way. We had commoditized. We had restaurant on the walls of all our previous inventions. And by the time the 90s and the ohs came around we were really out our innovation Chest was bare. Our cupboard was bare. So we reconstitute on innovation in the company by changing the portfolio. So you took down chemical. You renamed it down at
one
CARDINAL
point. Took the chemical out of it. And then you merged it with dupont. Yeah. And then you split the company into
three
CARDINAL
different companies. Is that right? Yeah so
two
CARDINAL
amazing
American
NORP
iconic companies
300 so so years
DATE
of corporate issue between them
Dupont
ORG
found it on explosives they all found it on you know chlorine you think about the corporate history in both of those the portfolios they both at assembled by the time we hit this cent Were across a range of different applications and there were many things to many markets. So what the premise of the case was working with their brain on the dupon site was we put the
two
CARDINAL
together and separate them into more pure please. So Dao materials the
ag
ORG
company
Agricultural
ORG
products and of course the
Dupont
ORG
company the new
DuPont
ORG
company on specialty chemicals and plastics hey you step down and CEO number of
years ago
DATE
did your wife say when you're done being the CEO is the time you spend more time with me and stay at home and now you're running around the world so was she disappointed or she happy to have you out of the house still did she expect me Retire no I should knew me but the story on the
Olympics
EVENT
is a classic that call came I don't know
2 months ago
DATE
on a
Saturday
DATE
we're in
Sydney
GPE
now living room I got a call from the premier of the state of
Queensland
GPE
saying we'd like to offer you the presidency of the
Olympics
EVENT
I said excuse me And and you know I I was aware Brisbane had won so I didn't embarrass myself but I said can I get back to you can you tell me a little more give and I'll get back to you yeah but we wanna announce it on
Monday
DATE
so I Stop. Okay. So, anyway, my wife said, who's that? And I told her and she. And she said, look to me in the face. She said, you've got to take it. And I said you know how busy I am right and she said I know how busy you are but you gotta take it cuz you're the right person to get it done And if it means you're gonna drop some things, drop some things but take it. That's the type of partner I have. Back in
1997
DATE
I was interested in the.
Back in
1997
DATE
I was interested in the following question which is There are a bunch of the dinosaurs called
Sorapod Dinosaurs
PERSON
which had really long skinny necks so a potassirus is an example I also really long skinny tails. So I made a computer model that showed that in fact the tale of these
Sorapod
NORP
dinosaurs could actually act like a whip. A bull There's a way of bullet makes that cracking noise. Yeah. Is because the chip of the whip actually goes about twice the speed of sound And that crack is a sonic boom. Yup I think the way they got a date was to impress the females by making loud booms. How did you wind up to be the chairman of all of a bill company when you hadn't really been in that industry? I think the manufacturing thermatic that I had throughout my whole career wrote a book on it making an America Made me an attractive candidate to a whole host of different companies around the world whether be bored or advisory certainly the lucid experience was something I didn't predict but it came really through my association with the kingdom of
Saudi Arabia
GPE
who were the major investor now
Tiva
ORG
the prettiest little I got asked by the
PAF
ORG
to come in and help rebuild the company and create what you see here which is full-fledged EB company
first
ORDINAL
Greenfield
PERSON
site EB's test that did a modified site right so we build a
Greenfield
PERSON
site and it's up and running right now so matter factory was a big piece of
Batis
GPE
that was attractive to joining the
Lucy
PERSON
experience. So, shout out to
Ramcoast
LOC
now the most valuable company in the world. Is that right? Yes. And you're involved. You're on the board of it. Yes. And you see energy prices or oil prices coming down in anytime in the near future? Do you think they're gonna be
over $100
MONEY
approval for quite some time? Look a commodity markets as you must know well know in your story Korea David impossible to give you an answer other than you know the most important dynamic of the mall is climate change and see a tour emissions and how can we make oil and gas for that amount of cold before but I think coal is destined to be phased out But rolling gas and our addiction to it and the transition that is needed to get see a
two
CARDINAL
out of the air will eventually dampen demand EVs which I'm sure we'll talk about soon
Evies
ORG
alone electrification of The transportation market. We'll see a damping of demand but it's impossible to predict in a short term. How do you predict a war rushing
Ukraine
GPE
and the effect that it had on commodity prices? So, we do, we will go through periods. A zigzag line if you like a pricing. For
some years
DATE
to come. And I can't tell you whether it's gonna be high or low, no one can But
Sally Ribbit
PERSON
which has a normous amount of oil. Seems to be interested in finding ways to do things that are not related to oil and electric vehicles. It's one of them I guess, right? Yeah, diversification. Division
2030
DATE
that was Place and you'll you'll quite familiar with. By his highest crown prince has has a big piece of it to diversify away from oil and to go into other businesses and other activities that might be related so chemicals and plastics and downstream creating a circular carbon economy, hydrogen, and going to the green economy. Solar, renew General wind. Nuclear power. This deviceification on the energy mix is a big part of the vision 2030 plan. And that's what Aramco and others in the kingdom are driving. Let's talk about Lucid from Mumma. You're the chairman of Lucid. Yes. And it's an electric vehicle company. Tesla seems to be so far ahead of everybody else. How do you compete with So when they have such a large share of that mark.
Imma
PERSON
hear the chairman of Lucid. Yes. And it's an electric vehicle company. Tesla seems to be so far ahead of everybody else. How do you compete with Tesla when they have such a large share of that market? This is a technology business. So, in your earlier question about how did I get involved? I said manufacturing. Well, manufacturing is an interesting word being useful
a couple 100 years
DATE
in humanity as we obviously went up the technology ladder. Humans are inventive and innovative because of technology advantages. Lucid offers a technology And beats everyone right now and has been recognized for it.
Firstly
ORDINAL
, is the distance we can travel without needing, you know, to charge and that's over
500
CARDINAL
mi
EPA
ORG
certified.
Second
ORDINAL
is our charging time. We can actually get a recharge of
up to 300
CARDINAL
mi in
22 minutes
TIME
. That's technology. Those
two
CARDINAL
topics are all about The car and it's Is aesthetically beautiful It's absolutely totally a luxury car and clearly the experience and the software that supports it is also technology. So what we've been doing at Lucid is homeming in on the technology side of differentiation. Is there room for a Tesla or a Lucid and a bunch of others? Of I mean we are going to see
EV
ORG
's as the primary motor transportation in our lifetime. Now, where is lucid manufacturer's cars?
Casagrando
GPE
,
Arizona
GPE
. Just outside of
Phoenix
GPE
. If I wanted to go buy one, where do I go buy one? Buy them online or you come to showroom like this and they cost
about $5000
MONEY
a piece or something like that. You are in the right place to buy one. We can maybe hopefully sell what you want as you leave. The we have a retail strategy. We go directly retail and service centers around the We're opening up retail centers as we speak in in
Europe
LOC
but we have them in
the United States
GPE
and this is an example of
one
CARDINAL
and the price point is not $
5000
MONEY
. We have a price point at the high-end lux Our competition is
Porsche
ORG
BMW
ORG
out here trying to be an electric vehicle for high-end cars. At this point in time, that's our strategy. We've got the dream, the Grand Touring, we've got the the air, and then the SUV, the gravity, these price points are North of
$100 thousand
MONEY
with the the dream at
161
CARDINAL
70 1000. But clearly that's a luxury and the mass market end where gentle motors and forward and others are in a pointing themselves is obviously the big opportunity. We'll eventually get there but we've made no announcements. And you have one of these cars? Do. I was an early buyer at full price. I felt it was important that I demonstrate my support for the team. I'll never forget the the amazing drive I had in it's I have it down in
Florida
GPE
where my residences I drove it drove to
Palm Beach
GPE
and drove around there and every time I stopped I had people looking at me And I knew it wasn't me. He was clearly the car. And then I parked it and I will kid you not. It was like a mob scene around me. It was one of the I think it was the
second
ORDINAL
car in
Florida
GPE
. So clearly I've not been seen. I valet parked it at this hotel where I was having dinner. And and the the gentleman wanted to compete with the other gentle
Ballet Park
GPE
. Can I drive a car and drive it? And I said, you know Maybe I should park it myself and so it's it's it's an attractive car and it really drives supremely well. Let's talk about the roads on which these cars drive. So, you've been advised with the President of
the United States
GPE
on infrastructure and manufacturing but on infrastructure, you've been involved with the legislation that was passed not long ago.
United States
GPE
infrastructure so terrible compared to so many other a wealthy countries You know I have been around
US
GPE
politics like you for
a couple of decades
DATE
and have served a variety of presidents from the different parties and and the attitude in
the United States
GPE
is obviously to keep taxes low and keep the public spend under control and the word control is interesting but that Forward thinking in terms of planning and therefore a short term is around our fiscal policies has hurt us I mean in essence you infrastructure is a long term And and to get a long term return putting into private hands is one way of doing it but really the public side of life has to be willing to be
Doing it but really the public side of life has to be willing to brew the forward spend the forward spend on airports and roads and and
EV
ORG
charging stations has to come from the public domain now raising taxes To spend money on infrastructure Means you've gotta trust the people doing the spending. And I think the public private model is the way to go there. Which is actually create an infrastructure bank. That these
US
GPE
public company owned or public sector owned that has private sector matching funds. I think that sort of breakthrough has yet to occur in
the United States
GPE
. So where we go is tax and spend which unfortunately Disagree with. Manufacturing is something
United States
GPE
has thought by many people not to be as good at as we were 40,
50 years ago
DATE
. Is that fair? There's a perception That manufacturing is
yesterday
DATE
's sector and that is so erroneous because pretty much everything Autumn life is made Big, expensive cities have a lot going for them but if you live in one, you probably notice that these big, expensive cities keep getting more well expensive. So there's really nothing keeping you there But then again moving is a hassle Well, what if someone paid you 10 grand to do it? What if they threw in free office space? A bicycle or a gym membership
Programs
WORK_OF_ART
and cities and states around the
US
GPE
are doing exactly that and they're getting Lot of interest.
About 90 1000
CARDINAL
applications. We had over
1800
CARDINAL
applicants from all over
North America
LOC
. Beneficial to their communities and the workers joining them or are they little more than flashy advertising campaigns for places looking for an injection of fresh talent
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. People talking about that
all day
DATE
yesterday
DATE
Now your
first
ORDINAL
book was about manufacturing and manufacturing is something
United States
GPE
has thought by many people not to be as good at as we were 40,
50 years ago
DATE
. Is that fair or not that that's a perception at least. Yes, that's And I addressed it in the book because we think smoke stacks and we think of rivers on fire when we use the word branding is everything and today everything it's branded in a heartbeat right through
Instagram
NORP
and you name it and as a result of that there's a perception that manufacturing is We've only got
three
CARDINAL
functions. Okay? To invent, to make, and to sell. The rest is overhead. And the make part Actually very connected to the event park
China
GPE
was brilliant in its strategy through
the 30 years
DATE
of doing sale paying because it attracted assembly And then insisted on R and D there were only 10 R and D labs foreign owned in
China
GPE
in
1990
DATE
by
2010
DATE
there were
40 1000
CARDINAL
for an R and D labs Because they wanted to know not just how to make an assemble they wanted to invent all the way back to the material to the actual the battery to the products Do that they needed our arms.
Oh not just how to make an assemble. They wanted to invent all the way back to the material to the actual the battery to the products and to do that they need an R and D. Manufacturing R and D live together. Okay they're live together through prototyping and scaling and the topics of invention and innovation are in manufacturing cuz you actually learn while you make and then when you digitize you learn more digitize the manuf Is a massive innovation opportunity And frankly one of those things that
the United States
GPE
is phenomenal at Is we know how to innovate and be an entrepreneurs and how to scale but if we've lost our billy to actually make then we start to atrophy the innovation side Conventional wisdom is that
United States
GPE
can't manufacture things at cost that are attractive to markets so that's why we've outsourced it. You think that's unfair? It was fair during what I call the loss of industries such as textiles and footwear and cloth Which were very labor intensive. It's completely not the case with things that make the
iPhone
ORG
, okay? And all the circuitry and semi-conductors and high end technology,
Pots EB's
ORG
this is where
the United States
GPE
is actually the best at and it's not labor cost driven so offshoring and outsourcing and and moving things for labor costs fine they went to countries that have lower labor costs
Bangladesh
GPE
is on the
Vietnam
GPE
's but the high-end manufacturing, the quality manufacturing, for
2 days
DATE
and
tomorrow
DATE
's technology innovations. We should be the epicenter of that right here in this country. Because the Past is actually not the relevant cost. The relevant cost is actually the raw material, the supply chain, and we have the market This is one of the few countries in the world that can say i'm one country I have a massive market and by the way I'm in
Darwin
PERSON
lot of people and natural resources that's manufacturing Now you are an immigrant to
the United States
GPE
and your grandparents were immigrants to
Australia Immigrants
ORG
has often said have like capacity to work very hard to prove themselves to move up the ladder so do you feel you have an immigrant mindset that is pushed you to do all these things I think my story as growing up in an immigrant family where
English
LANGUAGE
wasn't the
first
ORDINAL
language at home. It was
Greek
NORP
and speak
Greek
NORP
man do. I do yeah and use for a lot. I guess when you're talking the Olympic committees. With all of that but yes it's probably useful for that. I think the immigrants backstory I have really drove me to work hard. But also To make a difference and a very
American
NORP
trade what attracted me to
America
GPE
this very day and don't embarrass you you're a great example of it is the amazing giving back that occurs in this country and not enough of us know a lot about it it gets a bit a few headlines So I mentioned the text and spent thing as being a detriment to building modern infrastructure but the on the other side Are charitable and give
Care
ORG
about making a difference in their community that's what Dow showed me and that's what I and my wife poor and I live today that
American
NORP
Hey For an immigrant? Means that for the next immigrants, I can make we can make their life better. So for somebody who's watching this and wants to be a successful global business leader, what are the skill sets is it hard work, learning how to read well, keep continuously reading, learning how to be good speaker, what are the skill sets you think somebody really needs?
One
CARDINAL
of the things that I would add to that list I agree with all of that that I would do and I still do to this very day is I would prepare Well before I got the job or was given the nod I would know as much about what I was about to be offered or to do Before I actually did it I would read I would talk well before
the days
DATE
of the
iPhone
ORG
I would go to the library I remember my father knocking on the door was the botanical salesman remember those books there were
12
CARDINAL
of them right and I would begged him to to buy them and he said only if you read them all And I read them all. And I was so I was
12
DATE
and so so I think preparing So that when you get the.
Read them all. And I read them all. And I was so I was
12
DATE
and so so I think preparing So that when you get the right to talk Do you have the podium? When you have the right to say something You actually have the knowledge to speak to it I think people have gotten Bored with facts So, you've gotta blend it with interest. Personalized the facts Examples and then demonstrated yourself. I think that cycle of teaching needs to be introduced certainly in our education system but in real life, what are your parents say to their neighbors we have it on usual
12 year old
DATE
is sitting here reading the unsightly
Peter Botanica
PERSON
. It Where you were told to read. You know, on
these days
DATE
, of course, parenting is forcing kids to get off the TV and reading. But no, I, it was nothing I really noticed. It wasn't seen as odd. I'm going to name a couple of of your babies. I don't know if I'm asking you to choose amongst your children but you know, some of the most recognizable buildings by you, of course, the
millennium
DATE
bridge,
London City Hall
GPE
, the right stag, and the great chord
British
NORP
museum, what was your favorite The right stag does stand up because
first
ORDINAL
of all it's an energy manifesto so so it transforms That was dependent on fossil fuels uses all the technology to produce something which just essentially carbon neutral and there's a public building
Symbol
ORG
of a nation
Rates
ORG
. Sustainability if you can You can get a new life to a building. It also
Parliament
ORG
in the world so it puts The public Above. The politicians who are answerable to them. And that of course was made possible by the politicians. So it's it's a demonstration of democracy in action. Watch
Bloomberg
PERSON
surveillance early edition for the news you need when you need it. In
new york
GPE
and
Anna Edwards
PERSON
in
London
GPE
. Twice as much as Can it sustain it's normal at a time when everybody else is facing a very different reality Be prepared be ahead of the game. Hey Facebook Blueberries. Hey Facebook Access the financial world on demand. Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Thank you,
Andy
PERSON
so much for coming down. It's really wonderful to have you here in person. It's my pleasure to be here. Thanks guys. We actually lived in the same dorm in college.
Just a few years
DATE
apart. So, it's been almost a year since you took over From
Jeff
PERSON
CEO of
Amazon
ORG
and it's been
a year of first
DATE
the
first
ORDINAL
stock split since the. Com boom the
first
ORDINAL
vote to unionize in
Amazon
ORG
warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. I wanna start with a quick report car.
The
first
ORDINAL
vote to unionize in
Amazon
ORG
warehouse your
first
ORDINAL
Bloomberg Conference. Thank you. Start with a quick report card. In
February 2021
DATE
Jeff Bezos
PERSON
shocked the world by announcing plans to step down as amazon CEO
Months later
DATE
he passed the reins to
Andy Jassie
PERSON
his long time top lieutenant the architect of
one
CARDINAL
of the company's biggest profit engines
Amazon
ORG
web services
Basils
PERSON
has stayed on as executive chair leaving Jassie to navigate a critical inflection point in
Amazon
ORG
's history. Does the company manage market turmoil rising inflation and regulatory and a push by some warehouse workers to unionize all while keeping customers coming back join me on this edition of
Bloomberg Studio 100
ORG
.
Amazon
ORG
second
ORDINAL
CEO
Andy Jassie
PERSON
he joined us from our flagship
Bloomberg
GPE
technology summit in
San Francisco
GPE
I'd like you to grade
Review
ORG
of
Amazon
ORG
's performance But quickly how would you grade
Amazon
ORG
's performance over
the last year
DATE
with customer Well, I think we, you know, I'm not sure the right person agreed myself during the year or not but I I'll give you my take. You know, I think with respect to customers, I think we've Lot of good you know and I and I think if you look at during the pandemic which really has extended till the early part of
this year
DATE
It all so much of the
PPE
ORG
and food and essential items and people equipping their home offices From
Amazon
ORG
and and you know to scale the way we needed to remember in
2020
DATE
we grew
39%
PERCENT
your
over year
DATE
on a
245 1 billion dollars
MONEY
revenue run rate I mean it's very it's unpreceden Never happened before but it was really hard to do that and we had to take the really big footprint of fulfillment center footprint. We built
the first 25 years
DATE
of
Amazon
ORG
and doubled it in
24 months
DATE
. We built out that transportation network in
just a couple years
DATE
. You know, we nearly double the size of our workforce during that time and I think you saw it Businesses, you know,
AWS
ORG
is a really big part of helping And governments have business continuity during the pandemic and so many companies and organizations in
the last year
DATE
made this strategic decision that they were gonna stop running their own infrastructure technology and disproportionately chose
AWS
ORG
to help them move to the cloud and we spent a lot of time helping them make that Information. So, what about investors? I mean, the stock is down significantly from a peak
last year
DATE
. You know for investors or financially I'd say it's mixed you know I think we have some businesses are growing really strongly if you look at AWS You know in in
2021
DATE
grew
37
CARDINAL
year% over year it'll it's not a
74 1 billion dollars
MONEY
revenue run rate business it's pretty unusual growth and we grew
58%
PERCENT
over year and our advertising business you know it's
32 1 billion dollars
MONEY
revenue run rate business. So, some businesses growing really strongly and you know, we've continued to grow in our retail business despite pretty crazy, comparables during
2020
DATE
but I think the real challenge for us there is on the car side and there have been several Of how been some of which are more controllable than others. You know, I think the part that's less control was really round inflation and I think we thought that inflation would start to attenuate in
2022
DATE
and with the war in
Ukraine
GPE
, it just went the other way. It has significantly accelerated. So, the cost of trucking and line horn, ocean and air, and fuels to Substantially going up I think that will turn you into some point. No one knows how long that'll take I think the more controllable areas for us are really around fulfillment center capacity and productivity. It was taken
about 24 months
DATE
to build new filming centers during the pandemic And so we're to make decisions you know in
mid 2020 and early 2021
DATE
on how much demand we're gonna plan for and so you know we we end up with more capacity than we need right now and and there's a number of things that we're working on We've stopped building our properties where we don't need it yet and we've let a number of leases lapse and not a small number, you know, both those things. We've had a lot of occasions Street where we work on productivity, made improvements, and we have a lot of clearly to find initiatives and I'm confident we're gonna get back to the right.
Both those things. We've had a lot of occasions Where we work on productivity, made improvements, and we have a lot of clearly to find issues and I'm confident we're get back to the right level profitability. You are gonna sublieze
30 1 million square feet
QUANTITY
of space. Is there a mistake in the Because of the overdose Have to make these decisions
2 years
DATE
in advance and again if you put yourself back in
2020
DATE
where we were going
39%
PERCENT
your reura on a
245 1 billion dollars
MONEY
revenue run rate It's very hard to know what's the right amount to build and you have to make a decision and we The decision to air on the side of our consumers and sellers. Now, how would you grade
Amazon
ORG
's performance with employees, your colleagues, there has been some high profile. Yeah. That And when I started in this gig we had just create a new leadership principle to strive to be earth's best employer and I think we're you know we spend a lot of time trying to think through what that really means is broad and I think we've made a fair bit of progress but it's still early in my opinion but I still think there are Areas that we can keep improving. You know, and I think
Yo
PERSON
the first one I I'd mention is safety you know I think that you know in our fulfillment centers that is the top priority and you know when you get into the details the numbers and outside of all the spin of it all you know we're Average there but we're not trying to be average. You know, we wanna be the best in the industry and the best in the world at it and that's a high priority and and an area that I'm passionate about and the team is passionate about. And I think we have a lot of work we can do to make our employees everyday lives easier. We are we've notified kind of a top
100
CARDINAL
list of Areas that we can be better at that we're just metronomically stepping through and so we've made a lot of progress but we've a lot of work to do still.
Jamie Diamond
PERSON
says he's preparing for an economic hurricane.
The World Bank
ORG
just slashed its forecast for global growth. How do you feel about the economic climate I wasn't planning on giving any guidance to the cat. But super bad or super super bad. I think there's some things that are released to
Amazon
ORG
that are useful to remember. You know, I I think the first piece is remember that
85%
PERCENT
of the of the worldwide retail market segment share is offline. And if you That that equation's gonna flip at some point which we do. I think it will it will flip over a long period of time. If you look at different downturns you know should we have one at some point. We've been through a few obviously in
25 years
DATE
that Customers change their habits and so, you know, I also think there's, you know, those
two
CARDINAL
reasons, those
two
CARDINAL
factors give me some optimism that even if we have a downturn that we have the potential to still grow. We have a road map that's, you know, Probably
3 to 5 years
DATE
long and we're gonna continue to invent
Continue
GPE
to be in surgeon and we have a lot of work to do to get to where we think we ultimately can get for customers. No, when it comes to the stock as I mentioned, it has fallen significantly. Do you think investors are missing Thing or has tech just been overvalued and this also course matters to employ Significantly paid in stock Well, you know, look, I haven't been in
Amazon
ORG
for
25 years
DATE
. I arrived at the company
3 weeks
DATE
before we went public I have never tried to predict what the stocks gonna do and anytime I've tried to a little bit I've been wrong so you know I think it's it's pretty hard to Hard predict what's gonna be in any short period of time. I do really believe that
Benjamin, Benjamin Graham
ORG
,
Max
PERSON
, him that in the short term, the stock market tends to be a voting machine, a long-term intense to be a weighing machine. I think if you, you know, we've been A lot of points
25 years
DATE
to be at
Amazon
ORG
The macro factors are off and Stocks are down. Our stock is down. You can't really control that. You know, we have a concept we talk about a lot of
Amazon
ORG
. You know in the ultimate output for a company a share price you know and then other big outputs of free cash flow or profit or revenue you can't Manage the outputs you have.
It's a free cash flow or profit or revenue. You can't Manage the outputs. You have to manage it. The input level and that's where we spend all our time and so if you do the right things for the business long term, things tend to work out. I think we've had very good returns for invest You know, expected to be true again. Do you see amazon strategy as fundamentally different from
Netflix
GPE
in Disney and if so how People ask me all the time what is the key to being a really good investor I tell them it's a surround yourself with and work with The best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest investors in the world. The people that I would like to have managing my money. At the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Companies know they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so software is come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is It because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. TC I think
four
CARDINAL
most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? What are the moonshots at
Amazon
ORG
that are capturing most of your time and attention? What is gonna define the next era of
Amazon
ORG
? I mean, is it is Is it something else? Well, you know, we have a unique way that we look at big, new investments and I'm not sure it's right or wrong. It just happens to be our way and we ask ourselves when we're considering something.
Four
CARDINAL
questions. We we ask If it's successful can it be big and move the needle in
Amazon
ORG
is it being well served
today
DATE
Do we have a differentiated approach Do we have confidence there if not can we acquire quickly if we like the answer those questions we'll go pursue it with a single thread team that isn't distracted by the rest of the business and sometimes that leads to innovation investments that seem pretty obvious like you know when I got to the company
Books
ORG
only retailer and then we expanded to music and video electronics and obvious people. Other times that process does not lead to investments to seem obvious to people. I mean,
AWS
ORG
was something that people externally and internally thought was a little bit nutty at the We just imagine what
Amazon
ORG
would be
today
DATE
without AWS and and I think that you see the same thing here you know the there are so many significant investments we're making that I'm excited about I'm gonna have to constrain myself to a few but yeah I've I'm really excited about what we're doing in the prime video space I think Clearly on the right track there and building a significant business. That's interesting because
Netflix
PERSON
also just announced some layoffs. Yeah.
First
ORDINAL
subscriber loss in
a decade
DATE
. Disney cutting back on costs. Do you see
Amazon
ORG
strategy as fundamentally different
Netflix
GPE
and Disney and if so how? Very bullish on it and remember we all the all the miles are a little bit different but for prime video we have
200 1 million
MONEY
plus prime subscribers who are you know get that entertainment for free by Of prime and and so we've a little bit different pricing model than some of the others but I I'm incredibly encouraged by what we have coming if you if you look at me we launched the show Reacher earlier in
the year
DATE
was a huge hit we you know we the Hey Facebook season we we just launched new boy season which is are you a big boys fan with
Amazon Vot
ORG
? It's very good. Of course we have go to the rings coming up you know in
Thursday
DATE
at football. So, I'm very bullish about it. We also, you know,
It's very good. Of course, we've go to the rings coming up, you know, in
September
DATE
and
Thursday
DATE
I'm very
bush
PERSON
about it. We also, you know, we're excited about what we've done with
MGM
ORG
. You know, I think some of the acids there will go very well with the rest of what we're doing entertainment wise. So, if you look at
Warner Brothers Discovery
ORG
in
Paramount
ORG
and
Stars and Global
WORK_OF_ART
. They're building really Never forget the subscription businesses. So, I'm very bullish about that business. I'm optimistic that we have a chance to build a significant grocery business which is, you know, early stages for us I I'm excited about
Kyper
FAC
which is our low earth orbit satellite that we're building. You gotta remember there are
300 to
QUANTITY
400 1 million
QUANTITY
people in the world who have limited to know internet connectivity. I mean, just think about how different the Is when you don't have that type of connectivity and so I think that's a really significant opportunity that has some
AWS
ORG
characteristics to it. I continue to be very optimistic about
Alexa
ORG
. You're building the world's best personal assistant. We've, you know,
200 1 million
MONEY
So ready that are using
Alexa
ORG
we're clearly onto something there and and then you are automatist driving ride healing Zooks that were building you know here in
Bay Area
LOC
I just think with the way auto consumption is evolving I think that also is a Be really significant. Yeah, I don't know if I don't know if all of them are gonna be successful but if anyone of them becomes the
fourth
ORDINAL
pillar for us on top of marketplace and prime and
AWS
ORG
work completely different company. Just like we were when
AWS Came
ORG
successful. So, I think they're very worthwhile investments and bets and I'm optimistic about it. You didn't mention Astro Hey But i mean our home robots gonna really Where is it? No. It's not really widely available for sale. What's I hope you get one. Okay. Thank you Everyone's very curious about
Jeff
PERSON
's role
these days
DATE
. What kind of executive chair he really is. He said when he left that he'd focus his attention and energies on initiatives that he really cares about as at
Amazon
ORG
but from the outside it looks like he's really focus
Philanthropy
ORG
he's focusing on space what kind Executive chairman is he What you know
Jeff
PERSON
has always gonna be involved and he has you know All very lucky to have been in
Amazon
ORG
for
25 years
DATE
. I feel very lucky to have worked directly for
Jeff
PERSON
. For
20
CARDINAL
of them. And we have AA really close relationship and have for a long time and I think we share a lot of the same values about customers and how important is the optimize for customers and how high standards they need to be You know given how easy it is for people to switch and the importance of invention and speed and so you know I just feel very lucky to have had the chance to work so closely with them. So, is your relationship? I mean, he was your only For
25 years
DATE
right is your relationship Mentally different. Yeah. Of course, you know, every single job you have, the relationships different. You know, remember might
the first couple years
DATE
I work for
Jeff
PERSON
, I work is what we call the shadow then, what's really like achieve a staff That was different than when I was starting AWS which was different from when we got AWS going and it was you know a business that was starting to do well and it's different when I'm in the CEO role but you know the cost and has always been that we have a great And we collaborate really well.
Amazon
ORG
is poised to become the biggest private sector employer. In the world
second
ORDINAL
only right now
Walmart
ORG
is is in that spot But
Amazon
ORG
will probably soon surpass it
First
ORDINAL
vote to unionize at an amazon warehouse I know you've been spending a lot of time at warehouses When you look at someone like
Chris Malls
PERSON
who I think some people look at as this modern day hero who got fired, pulled off this union vote. What's your message to Like him. Your message to the folks who think maybe we should join a union. I know I think that in the first thing to be clear about is that employees get to make that choice whether they wanna have a union or not. They always have had that choice and it continues to be their choice and you know, we happen to think they're better off without a union for a number of reasons. Including the fact that, you know, it's it's much harder when you Union to have a direct relationship with your manager Get things done quickly. So, if you see something on the line that you think could be better for Your team or you or your or customers.
Safety and that's our intention. You made a huge mark On
Amazon
ORG
with
AWS
ORG
obviously. A mark that you want to make Still. I'm
David Weston
PERSON
. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio Stocked early enough all these precious materials you were just mentioning and we won the lucky side that our pronounces was spot on in a way forecasting what kind of material we would need and what quantity we would need The
FTC
ORG
has revamped its anti-trust Into Amazon and buy some accounts is Are you preparing for an anti-trust lawsuit from the
FTC
ORG
? If you are a large company, it's growing as to a significant extent like we have. You have to be prepared to be scrutinized and and we have known this for some time. You know, many years and we have tried to run the company with that mind and knowing that if if somebody look, We will stand up to that scrutiny and I you know I think that's what we've tried to do in running the business. We can't control what, you know, you know, whether organizations bring different suits against us but I think if you look at our business, if you actually look at If you take out of, you know, take out of the equation that they're they're may not be the most objective, you know, leadership when it comes to amazon and that organization. If you look at the facts, you know, in our retail business, we're about
one%
ORG
of the worldwide retail market segment share. And remember,
85%
PERCENT
of it is still offline and Work in our
AWS
ORG
business. You know about to be how you measure it
95%
PERCENT
of the worldwide global IT Span is on premises you know and then we have a cloud business and then we have a portion of that you know we were leading market segment share in the cloud part of this We operate, you know, who we compete with,
NWS
ORG
is really on premises. IT in addition to the cloud. So, you know, these are relatively small percentages of of the Reply and you can kinda step through all the businesses and I think simply because you've been successful in a few different businesses, doesn't somehow mean that you have a natural market power. It just means you've been successful in a couple Customer experiences but we still have AA relatively small amount of market segment sharing those areas. What about the
SEC
ORG
? You're being sued by them over
third
ORDINAL
party data and how you've used it. Do you think in the past
Amazon
ORG
made mistakes with letting employees in How those
third
ORDINAL
party sellers were doing? Pretty good control. I mean, you know, we've, of course, disagree with the premise of that but I would say that we have very good controls with respect to the data that the different employees sets were able to see and by the way, I think that we can be better for sellers. You know, I I think that Yeah we can have better tools from the get started we give better tools from the manage what they're doing across their their different
Amazon
ORG
units I think we can communicate there's a whole bunch of things we can do better and we agonize over every single email or communication we get from sellers and we do Regularly robust surveying and a lot more sellers are happy with
Amazon
ORG
and unhappy with
Amazon
ORG
and I think if you look at What they're able to do is you know as
A lot more sellers are happy with
Amazon
ORG
and unhappy with
Amazon
ORG
and I think if you look at What they're able to do is you know as a business by virtue of selling on
Amazon
ORG
versus not a completely changes what Sellers don't really long for e-commerce software that exist in lots of places And it is not very expensive. What they love about selling on
Amazon
ORG
Is that they get access to a
hundreds of millions
CARDINAL
of customers and that completely changes what their prospects could be in terms of the businesses they're building. So, we have a lot of work to do there like we do in a lot of other places but I think we were very strong partnership with sellers. What's the view of the supply chain right now and how much pain there is going to continue to be and for how long? Well you know I think that There's a lot of challenges in this in the supply chain still. I mean, it's it's gotten better than it was but there are all sorts of challenges, you know, non-perishable goods, electronics, chips, it's still a really, you know, significant issue Sorts of businesses. We have worked really hard to open a lot more. Going to present some ports in the in the increase our capacity in getting products in but I think it's gonna be something that companies battle with for some time. You made a huge mark. On
Amazon
ORG
with
AWS
ORG
obviously. Mark that you want to make Still on
Amazon
ORG
. I mean, in this new role, Gonna define the
Andy Jassie
PERSON
era Well, I I don't I don't really think of it that way, Emily. I mean, I I don't think it's really about any jazzier or anyone person. You know, and and by the way,
AWS
ORG
was not about anyone person. That you know, if you spend a time on
AWS
ORG
, Is an unbelievable team. Not just an incredible leadership team which it is. But just top to bottom. And then the number of inventors and people care about customers and Operate you know something where it has to work almost like a downtown it's it's always teams and so I look at every single one of our businesses You know take our retail business or our consumer business which is the oldest for businesses
85%
PERCENT
of it still lives offline. Like I I think we have a lot of upside and a lot of growth and I think as much invention as we've seen
Last 25 years
DATE
, you know, the time I've been there, I think it's it Looks small compared to
the next 25 years
DATE
. There is a lot for us to invent. On behalf of customers and so, you know, I'm excited to be part of the team that makes that happen. You know, we are continuing to, you know, to increase the amount that we give back to the communities in which we have big And that really matters to me. I think we were responsibly do that and so, you know, it's it's it's a long journey that we're working on but I'm excited to be part of it and you know,
Deter
PERSON
for a long time. Well, thank you for joining us and telling us about the way the journey is going so far. Thank you.
Andy Jackie
PERSON
. Do you see that coming
Call
PERSON
.
In
the coming months
DATE
do you see that coming true
Cop
PERSON
and wrong.
Bloomberg
PERSON
. But the sign Alphabet sun
Microsoft
ORG
suction adelaide
IBM
ORG
's
Arvin Krishna
PERSON
micron technology
Sanjay Mahotra
PERSON
and that's And that doesn't count
Indians
NORP
running companies all over the world. So many
Indians
NORP
risen to the top.
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to Into
one
CARDINAL
of the
Indian
NORP
institutes of technology. It gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make up
Three fourths
QUANTITY
of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
. And it's a Inflation is a terrible thing. Inflation you could tower.
Info
PERSON
. I don't think it's a currency. I think it's a commodity.
Today
DATE
, we're in and everything
Bob
PERSON
. I'm Francy Laquat welcome to Bloomberg Front Row and there are
Chen
PERSON
is a tighten of
European
NORP
banking at
UBS
ORG
he transformed the firm's investment bank he's now the chief executive of major
Italian
NORP
lender unicredit over the course of his career or child has had to navigate numerous crisis and now is Rampant inflation and aggressive central bank tightening. Inflation is biting For low income or lower income families. Really difficult to deal with a rising custody of energy. The
Italian
NORP
has also faced personal challenges recently including a dramatic and public legal battle with
Santander
PERSON
over the robot attempt to hire him as chief executive. I will always be sorry for how it went this is another bank I admire a lot and that hasn't changed I think for me it was more about Confirming the facts. It was obviously an emotional roller coaster. From a family standpoint it was great impactful. TV interview since becoming chief executive. We talk about his new role at
Una
ORG
credit. The impact of the war in
Ukraine
GPE
. The challenges of being
Europe
LOC
's bank and that sent under debacle. Here's my conversation with
Andre Alche
PERSON
.
Andre Orchelle
PERSON
thank you so much for speaking to
Bloomberg
PERSON
so you've been in the job just over a year was it everything you hope for more really much more yes not stressful Stressful but I like stressful I think that what has been great
this year
DATE
is a way you can credit Welcome to me in
two
CARDINAL
of the organization. It was full of passion, full of warmth, and you feel Energy of the people around you. People that want a new vision and new strategy, a new direction, and that ready to commit and own the future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleep?
Future. It was absolutely outstanding. Did that surprise you? Were you expecting more sleepy bank? No but I looked at it more from the perspective of a banker numbers what needs to be done or is the value where it's not the value But when you arrive, you see the people and that makes the whole difference. So that's what makes it more emotional, I guess. Is this like What what keeps you up at
night
TIME
Well the emotions are now very engaged and you feel a duty and a commitment to the people who are looking up at you to To take them in a certain direction That I think puts a lot of weight on your shoulders.
Russia
GPE
. Well,
first
ORDINAL
of all, for us, it's important to understand that we we have to remember that
95%
PERCENT
of the bank is not in
Russia
GPE
. No. And we cannot commit the mistake of spending The entire time on
Russia
GPE
where our emotion and the shock that we have taken Is probably driving us to do. So what we have done is we have a situation room that is fully committed to do that. We've all been skilled sets but we need from legal to tax to accounting to everything else And they work on managing our exposure towards
Russia
GPE
. The rest of the team is
105%
PERCENT
to
110%
PERCENT
focus on running the rest of the of the equation When I look at
Russia
GPE
separating it there are
two
CARDINAL
orders of effects that we look at one is a direct shock from our exposure to
Russia
GPE
. I think that in
the last 2 months
DATE
We have a chip to reduce it meaningfully by
about two 1 billion
MONEY
. We've done that actually. The team has done a great job without that costing the bank almost anything which was not to be expected. And at the same time we have understood very well and in a granular way what the risks are And we think that in Q one we took a very conservative set of provisions to try and insulate ourselves the most possible from the thermo effect from a degeneration of that situation. The provisions were quite large and the market took it quite well. Is that how you would describe it? I think so. I think we what we did is during
those 2 months
DATE
, we were able to articulate In a detailed way what is our extreme lost scenario for
Russia
GPE
? Converted in in numbers on hit on capital it's
about 130
CARDINAL
business points of capital And in
the first quarter
DATE
we took
about 195
CARDINAL
to be exact. Do with this units are you frustrated that you kept you keep on getting asked over and over what will happen to to
Russia
GPE
and then please there I think that anyone who has a large presence in
Russia
GPE
or significant presence in large in in
Russia
GPE
's being asked it's normal I think we believe strongly that Let us show you what we execute and let's talk about it then We have reviewed the situation. We have a number of options on that we could pursue. Very much affected by the next wave of sanction Who have a counterparts what we can do what we cannot do and at the same time we should not forget that we do have 4000 employees in
Russia
GPE
Have
1500
CARDINAL
corporate clients and what people sometimes forget is that
12 50
CARDINAL
are actually
Europeans
NORP
who are trying to go through the same thing that we're going through as a bank which is deal with a situation the best way possible. Do you have a preferred route And actually is there a situation where you just say like we need to get rid of it. What do you say to the critics? Let's say
Andre
PERSON
you should have gotten rid of this. For the cost. I think I review is Number
one
CARDINAL
my preferred route is not necessarily root but can I can be executed in the same way that we have given detail off how much of our crossbow exposure we have reduced We could have reduced a lot more If it wasn't for successive ways of sanctions that have closed the window on hook we can deal with What transaction can we do and in which timing The same applies to our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions that we have and by
To our local presence. The solution very much depends on what is allowed to be done by a complex web of sanctions that we have and by who are our counterparts. We believe very strongly that If we want to be consistent with what VU has decided We need to consider all the options in a way that they reflect fair value because this is a primary objective for Providing. Right. Too much value to accounter part. Let's put it this way. But he's not justified and at the same time balancing what is leading the best interest of our stakeholder and investors. How worried are you about inflation about the cost of living? You're so tied to the
Italian
NORP
economy. And this is an economy In terms of energy, in terms of also exports and imports with
Russia
GPE
. That's that's one of the most closely linked. We are tied to the
Italian
NORP
economy We're less than people expect because we are
about 40%
PERCENT
of the bank I think in
my first year
DATE
of operation being tied to
Italian
NORP
economy has been great. Good gross good dynamics stable direction of travel. Is that the driving effect? It is for drag effect. As we look forward, there will be a deceleration. We have
two
CARDINAL
central scenarios for ourselves.
One
CARDINAL
is a
Slow
ORG
down. And the other one is a depression. At the moment we see a significant slow down. As the central scenario although Has not been affected at all basically over effects be on prices So what we're seeing is inflation being the precursor of more. Inflation is biting We see for low income or lower income families. Really difficult to deal with a rising custody of energy. We also see But for companies that had investments or that were dependent on energy or on grain to a certain extent the whole value change has been completely alright Destroyed and so they need to reassess what is their position Change for sources Redesigned their models But at this point in time this translate In a slowdown I've investment. We haven't seen anything else. We do believe that going forward it will be a lot more disruptive. When you think of cutting edge technology at sea you might be thinking of stuff like this But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. About three% of all the world is huge I'm from shipping. Output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths?
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials People. You can enter phrases Ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Do you worry about a policy mistake from the ECB if if you have this possible recession or environment They don't raise rates. What happens to inflation and what happens to all of your
Italian
NORP
clients? Or
European
NORP
clients Well it's a very tricky economic environment for ECB but also in the
US
GPE
because on the one hand you have inflation but the inflation is generated by a specific sag
Well it's a very tricky economic environment for ECB but also in the
US
GPE
because on the one hand you have inflation but the inflation is generated by your specific segment of the economy A energy I'm not that sure that raising rates a lot will cool that down because it's very concentrated and it is linked to a dislocation between a friend demand The rest of the economy however We all agree that he's slowing down and maybe tilting into recession Rates Issue. So, it's very, very tricky to manage and yes, we're all concerned to finding the right balance. I think that getting to more neutral stance towards the oh is probably okay. The moment you go up a lot from there, it depends very much on what the rest of the economy is doing. How much of a warrior is that? Well, you always have a bit of that every time that there is a crisis there is a so-called flight to quality and that happens. I think that like for many other things, we need to see how old the economies of
Europe
LOC
are gonna perform in fact During this this environment And I think what I was telling investors
the other day
DATE
is if you look at
Europe
LOC
today
DATE
. And we are
5 months
DATE
into the year You do not see any deceleration of economy You seem flation, you see a rising rates, you see some very worrying sign You anticipate a social and an economy impact from the war but you're not seeing yet. That kind of degeneration that the market is expecting. What is the market looking at? I mean, this is like the market seems to be all over the place. We could be up, we could be down, or we're living through a correction. Well, I think I I read Any interesting report from one of the organization that covers us but we'll remain on named here but that was us to do a parallel between environment of
today
DATE
and the 70s on inflation Which tells you what kind of mood and and worry exist out there. Personally I don't think it's gonna be that extreme because I think there are a number of amortizers I mean if you look at the facts
Italy
GPE
has To Rebuke or re The average in of its energy to a significant It's value change so we now go to Another places to get a lot of gas or we will be going if you look at
Poland
GPE
they have found a way to deal with
Norway
GPE
if you look at
Bulgaria
GPE
they connected their pipes towards
Greece
GPE
and the gas for the rice from there so
Europe
LOC
is adjusting The question is how much time there is but
Europe
LOC
is adjusting. The kind of earthquake way because you could see if there's oil and gas bargo from
Russia
GPE
what happens to this continent? I think it depends on timing. This is that's why the The economic environment that we're looking at it depends on timing and extend of the Breakage away from
Russia
GPE
and to a certain extent from
Ukraine
GPE
If that is done very fast and completely As you said the impact will be quite dramatic if that is done over a Significant longer period of time the impact will be less dramatic do we have A significant alarm period of time. I don't know. But that is the key. And we always talk about gas but we also need to understand our independence on our commodities.
Nicole
ORG
,
Lithium
ORG
a whole of everything that the entire value chain was predicated on connections with
Russia
GPE
and grains connections with
Ukraine
GPE
That changes from
1 day
DATE
to the other the shock is very high You were talking about a political stability in it too. We were joking about the drugy effect. Do you worry? Is that actually politics in
Italy
GPE
? Has always been quite messy that this political instability comes back and hurts your bank. Well
Italian
NORP
or politics in
Italy
GPE
but forever
Italians
NORP
have been able to go through it And A lot of trust in the country and and I believe
I have a lot of trust in the country and and I believe the country has In a certain way And in a way I am much more nervous about the more general impact on economy in
Europe
LOC
the more general social impact on the account on
Europe
LOC
immigration things like that that are going to Not only but the broader continent. How much do you like taking care of risk? So I wanna talk about a little bit about what you're doing inside unicred. Do you feel like you're a risk manager? Is it about also cutting costs? So how do you you have one of the most generous plans actually for investors out there. How will you stick to it? Well I think
Stick
FAC
to it I think We have said very clearly that we felt that the execution of uni training unlocked would yield to a certain level of profitability A certain level organic capital generation based on that we could have very generous. Yes. Distribution to our shuffled. Was that free
Russia
GPE
? That was pre-rush. So Effectively the plan anticipated that our capital will remain stable through a period at the top end of our peer group and that we would distribute only the excess capital we would generate
every year
DATE
. So, in in that way, it is prudent. It is boardinated to us executing the plan and all of his slavers at the same time because of where we're coming from There is a lot of value to be created so that is what generates the distribution that we have. Then we get to the invasion of
Ukraine
GPE
. At the moment what we have done is we have changed our macro scenario reference from what it was before to slow down. From GDP standpoint it brings
about two to two and a half
CARDINAL
points less surgery to be gross than we were anticipating from an inflation standpoint it takes to a couple of percentage point more inflation than we were anticipating with peaks in certain countries obviously In that environment Still execute let's say the uni credit unlock plant as it is if we keep our eyes on the ball and execute as we should be because on a way the GDPD celebration is in part compensated by higher rates which are good for banks like Hey guys crucially important and I think we've moved from Attitude from it's an indulgence a waste of time almost an illness that needs a cure for something Universally important to human life Mysteries surrounding its necessity and utility have only just been recently uncovered Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting feel because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding It's easy to memorize things that makes you smart if you can But if you wanna be wise And why to use that information? And that's what you bring figures out while you're sleeping.
Bloomberg
PERSON
's
Amanda
ORG
Had
one
CARDINAL
of the most colorful careers. I don't know if that's the right way to describe it. I don't know how you would describe it. It's only in
the 5 years
DATE
. It's not been dull or boring following your career moves. Do you feel vindicated? That you were awarded that amount of money? With what happened with Santa I think the I will always be sorry for how it went. This is another bank I admire a lot and that hasn't changed.
For how it went this is another bank I admire a lot and that hasn't changed I think for me More about Effects The truth about a new existed And that has been done and it's time controversial. I mean you will find it black or white. Through the process that has happened That for me was very important because a number of stories were were written at the time. What happens then I mean obviously
Santa
GPE
has appealed we'll see But for me the important point was that
Matruce
ORG
is very facts are there and at least mentally I have moved on.
68 1 million
QUANTITY
without never starting a job but also to try and understand what labor laws and everything like that works. Do you think it's changed? The way we look at banking walls and Know if it has changed what I know is that we shouldn't forget that Banking is a highly regulated industry as a as a result of that senior jobs have a very large component of deferral in their compensation Invite your kids
7 years
DATE
And
more than 50%
PERCENT
if not
16
CARDINAL
certain cases of your compensation is deferred over
7 years
DATE
. If you do the math that means that at every point in time you're gonna have
between Four X
CARDINAL
of your compensation Deferred Ehm but it's your index to the share price of the bank where you are and if it goes up it's
three
CARDINAL
four X. Yeah. Becomes even more.
Verdict
PERSON
is when you change organizations. What do you do You either have the new organization that That Deferral Or you don't move Because it in effect that deferral is your entire savings. So, I do think that although these are large numbers, they need to be put in context of how they got there. Usually in most cases, in all cases,
Organization
ORG
who has Assumes that liability deferral. So, that number is liability and deferral. Is plus a few other things that occurred because of a case but that is what it is. It was an emotional roller coaster. Is it something that you've put behind or is it something that you don't think about? Well, at the beginning, it was obviously an emotional roller coaster From a family standpoint it was quite impactful and I think Personally given the estimate for that bank it was quite impactful I think the the important point was I Once I went through the preparation of the case. I detached and I left other people deal with it and it was quite fortunate. But those people were excellent. And then I trusted the process a lot of people told me not to trust the process but I did Any thunder dub being horseball. And you're talking me a little bit about your working from home policy. So do you think COVID has changed everything? Is it problematic for a bank to let people work from home? Let's say that what COVID has done both from a standpoint of clients and for the standpoint of employees is More remote Gile. Flexible. I think I think that is not a bad thing. I think it has taken away FaceTime To extend I believe strongly that being at work is important That's how you establish the culture. You train people That's how teams can interact with each other and brainstorm and come up with a good idea. On the other hand and we had started to do something similar at
UBS
ORG
at the time You need to give people the flexibility to organize their lives and you cannot say it's Five or it's whatever it is and that is it. So, if you allow that flexibility for people to organize their lives and if they need to take a
Friday
DATE
morning And then see the soccer match of their children And then On the
Friday
DATE
evening
TIME
. That's their their choice but I don't think you can replace human interaction brainstorming teamwork you know if you
Evening
TIME
. Their their choice but I don't think you can replace
Brainstorming
PERSON
teamwork. You know, if you look at the agile way of developing our new our new initiatives around IT. Come from representative from business, technology, compliance risk, all being in
one
CARDINAL
room, and instead of saying you do pieces, how do we resolve the mortgage product? You can do that in the office you can do that remote talk to me about attracting talent so do you do you worry about you know some of the bright young minds going to
Jake and Morgan Golman Sax
ORG
because they pay more would you worry about them going to crypto or Google because it's exciting Well I think what I have found is that Right minds are By money as they are and probably more by
Version
PERSON
what's for challenge what do I learn Is this company doing things that I am proud of Care for the environment. Do they care for the communities? Will I be followed in my career and developed which is why we just launched the These things especially in
the early years
DATE
Quite a lot of space in their decision As they move through And they come in and they move through when what thick spaces how do you treat them how do you track their career manage their career do you give them opportunity that's why I think we are very fortunate I can have A young person from
Bosnia
GPE
who start in the leading back in
Bosnia
GPE
does a tour into
Germany
GPE
Serbia
GPE
and then A skill set that has been refined goes back and it's a bank in
Bosnia
GPE
not many groups can do that and I think that's one of the attraction that we have. Would you like most about being chief executive? Trying to make a difference I have been told by many people that no, you know, this cannot be done or this is difficult. A little bit my chance to try and do what I think I it's right What I think it's right is usually I get it from talking to people who any fact can make a difference to unicorn and to be
80 1000
CARDINAL
people that are there and look back and say yeah I help move it from here to here And I helped What are our principal what we stand for? I think that will be a win. Chief executive job came up? Would you be up for it? I love you and pray too much. Thank you so much. Thank you,
Francine
PERSON
. A lot of the satellites have propulsion systems that you gotta move to get out of the way of each other or change their orbit a little bit. It's a service that you guys offered to help these companies know how to maneuver their machines. Yeah, we offer a collision avoidance survey. It's a subscription service. Send you an alert
up to 7 days
DATE
in advance if your satellite's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving satellites around but it's it's sort of like a harder problem now. Just because we've installed so much more hardware in the space. But you have a big collision. It creates a clouded debris and now all the other satellites are flying through this whizzing mess of debris as we add all of the new satellites in space. The risks of the collision, the likelihood of the collisions going up.
Access the financial world on demand Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Hey Facebook You watching the best of the cutter economic forum I manage cranny in
Doha
GPE
this
week
DATE
's event which was powered by
Bloomberg
PERSON
brought together global business leaders and heads of state to tackle some of the world's most pressing challenges from small supply chains and escalating On
Ukraine
GPE
.
The next half hour
TIME
we'll bring you all the highlights from the most important interviews and conversations beginning with it on musk the world's richest person spoke to
Bloomberg
ORG
's editor in chief
John McElth Waite
PERSON
about his head kind plans at Tesla why he thinks a recession is inevitable Course is ongoing bid for
Twitter
PRODUCT
. With respect to that the
Twitter
PERSON
transaction there's a limit to what I can say publicly given that is someone who was sensitive matter Measured in my responses here. Is not to generate incremental lawsuits. Hey Facebook sometimes manage to overcome Yes it deposition minimization is I think important So have
Twitter
PERSON
given you enough information? Well there are still You probably read about the the questions to other Number of fake and spam users on the system is less than five% as to reclaims. Which I think is probably not most people's experience. On when using
Twitter
PRODUCT
. So we're still waiting resolution on that matter. And that is a very significant matter. So We're we're waiting resolution on that. And then of course there is the question of Will be the death portion of the round come together and then will the
Sheryl
ORG
's vote in favor. So, I think those are the
three
CARDINAL
things that stand in the you know, if that needs to be resolved before the transaction can What about the general state of the economy? Does that weigh on you when you think about this? I mean you just described it. You have a super bad feeling about the economy. Are you still in that position? I've just said you earlier.
Joe Biden
PERSON
has just come out and said that A recession in
America
GPE
is not inevitable. How do you feel about the economy Well, I think it recession is inevitable at some point. Ask whether there is a reception in the near term
Best weather there is a reception in the near term I think that is more likely than that. It's it certainly isn't this. It's not a certainty but Appears more likely than lunch. Or what do you think I'm I'm I'm I'm with you With the
Twitter
PRODUCT
bid which is in a you are one of the And fastest growing investors in
China
GPE
Tesla you've talked about it being a
third
ORDINAL
Twitter
PERSON
that kind of public forum for free speech The
Chinese
NORP
historically don't tend to be very enthusiastic about free speech are you worried Whether you can keep those
two
CARDINAL
particular horses running is is buying
Twitter
PRODUCT
gonna get you in trouble with the
Chinese
NORP
? Well
Twitter
PERSON
does not operate in And I think
China
GPE
does not attempt to if you HVA was the Free speech at the work of the press in the
US
GPE
at as far as I know I seem You're not under pressure to at
Bloodberg
PERSON
to From
China
GPE
. So, I think there's I I don't think this is gonna be an issue. And in terms of generally of that issue of freedom of speech and
Twitter
PERSON
you've talked about
Twitter
PRODUCT
being making it even freer and letting more people onto it. Is there a limit at all to to who you think should be allowed onto
Twitter
PRODUCT
? My aspiration for
Twitter
PRODUCT
or in general for the digital town square would be that it is as inclusive In in the border says the word as possible That is it is an appealing So I mean I do like to get like
80%
PERCENT
of That's it
North America
LOC
and perhaps I don't know
half
CARDINAL
the world or something ultimately on On
Twitter
PERSON
it's in one or another And that needs, that means it must be something that is peeling to people. It it obviously can't have your place where they feel uncomfortable or harassed. Or there's something not use it. Can you set the record straight on
one
CARDINAL
thing which is this issue about the layoffs? I think
Said
PERSON
initially that
Tesla
GPE
10%
PERCENT
of the workforce will be cut then
10%
PERCENT
of salary would be cut then salary would stay flat and overall headcount would go up what What is the number? I know there's already I think being AA lawsuit The
10%
PERCENT
is is
10%
PERCENT
the goal to reduce the workforce. So what is the number that we should think about or that your planning? So it has the is reducing the salary work for us are
roughly 10%
PERCENT
over
the next Probably 3 months or so Expect
DATE
to grow at our
hourly
TIME
workforce where I expect clear that we expect to grow out around
hourly
TIME
workforce but we We grew very fast with on the salary side. And we we're a little too fast in some areas and so it requires reduction in
Workforce
GPE
.
About two thirds
CARDINAL
hourly
TIME
in
one third
CARDINAL
salary so I guess technically a
10%
PERCENT
reduction in the salary report is only roughly at
three three and a half percent
DATE
reduction in total headcount
Egypt
GPE
's finance minister doesn't think we're in one yet but does reckon the economy is slowing. I caught up with
Muhammad
PERSON
mate. No we are not already in a recession But we have now And I don't really think of economic
Wallet
PERSON
bank Have reduced their expectation for economic growth but If the current direction To be continued and Be even escalated I believe that
Eh to be continued Might be even escalated. I believe that and effectively we will go for recession. Global economy. Package of elements will work together leading us to recession High cost of financing
Nazare Developing
PERSON
countries in this world which can contribute heavily to economic growth will have to
Suffer
PERSON
from the negative impact which will be at the expense of their ability to grow Are you in shock Or panic over fuel and food at the moment. Panic rather than a shock I believe that Since we'll accelerate further it will materialize to a big shock. The consequence Of food and fuel is
13%
PERCENT
core inflation sir It's over second half of the year to get better. Do you share that view? Do you think inflation has plateaued or topped out? Expectation is to increase not to decrease. Significantly It depends Hey If oil prices will continue this event Food prices continue to this trend if the federals and other central banks will increase interest further We will go for further infilicia particular At you know we may start to see in addition to what we have seen until now
Difficulties
ORG
to get financing So it's
13%
PERCENT
on the core at the moment how how bad could it get If you have talking about
Egypt
GPE
and particular indeed sir
13%
PERCENT
You know will depend on how much inflation we are importing this A significant part why because if inflation accelerate further in
Europe
LOC
and
United States of America
GPE
as a result of all these factors And in addition to that higher interest rate will add to higher cost of financing this will mean that we will be negatively impacted we hope that this will not be materialized in the coming So we should What are they further And we don't know what will be there decisions very soon but to the act to in
Felicia
PERSON
. So you are worried about further significant From the central bank. I hope that
Egyptian
NORP
economy to grow and high cost of financing it will be a problem for the industry for the For the economy but eventually inflation is a core business infection control is part of the core business Up next the deputy chairman CEO of the He thinks the war in
Ukraine
GPE
has put in the oil prices. This is
Bloombad
GPE
. I recently seen during this period of time is that communicating via the
Communicating for staying in touch. People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet revolution I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. We've got the information This is a level of uncertainty that we haven't had to deal with. Television and radio Energy was of course the major theme of
the week
DATE
and the deputy chair and CEO of
the Kuai Patrodium Corporation
ORG
told us he thinks the war in
Ukraine
GPE
has only highlighted how important energy is to the world shake Nawaf Al Saba Rackings the conflict has put a
$30
MONEY
barrel premium into the oil market he caught up with my colleague
Francy Laquar
PERSON
We think that oil is there for the long term in terms of even any energy transition. So, We maybe concerned about what obviously
the next 18 months
DATE
is gonna do for financing and and for our cash balances but over the long term we're quite confident Good enough prices for us. Yeah. The war in
Ukraine
GPE
. Does that get pushed back? A lot of people have made before the the Ukraine war was to say this is gonna be a war against fossil fuels and that we must stop oil production. Well, the world's using more carbon now than it ever did before. And This crisis in in
the Ukraine Next
LOC
to all the humanitarian issues that come with it Shows you that energy is required to fuel the future and hydrocarbons have AA big role to play now can we make the hydrocarbons cleaner and and more efficient absolutely that's how what we're trying to do and that's what we're investing in whether it's through
Capture
ORG
utilization storage using carbon as ER processes or really abating the carbon footprint of At the lowest
Footprint
PRODUCT
. Now, we need to stay there. That's gonna require a lot of investment. It's just bad See more investment in the short term or no. Continue to investment. That is
spring
DATE
investment. Overtime you're seeing a lot of us also continuing to to to produce now
four four
CARDINAL
companies like
Overtime you're seeing a lot of us also continue to to to produce now Companies like
KPC
ORG
we look at the long term so we're investing right through the cycle but companies that that don't do that Putting in more investment right now. Going through the roof it's going to be an issue with the oil price and the energy price is so high right now when you're expecting these prices to stay wise I see AA war premium of
about $30
MONEY
in the current price right now. That's but for the war and in
Ukraine
GPE
, you probably be seeing
About $89
MONEY
barrel oil which is not that high. Over the past it's it's actually you know it takes you back to the the last thing that Somewhere in the $
67
MONEY
range which is still comfortable. The energy intensity of the world economy is
about a third
CARDINAL
of what it was
about 20 years ago
DATE
and it continued to go down so oil prices yes they do impact Economic growth. Has diminished. Anywhere. We're getting the same calls from our customers say demanding the same amount of oil and some cases of a little bit more. Up next
Steve Mnuchin
PERSON
on why he has a lot of confidence in
Jay Paul
PERSON
in the fight against inflation this is
Bloomberg
PERSON
. No one covers the world like
bloomberg
PERSON
. In
the coming months
DATE
do you see that coming through
Cop
PERSON
and wrong.
120
CARDINAL
countries the moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials Analyze Marcus You can enter phrases Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand. Hear from leading economists Policy makers. And industry experts be alive and on demand webinars. Only from
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ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars Welcome back to the best of counter economic forum former church secretary
Steven Mnuchin
PERSON
says inflation in the
US
GPE
can be brought under control I do have a lot of confidence in in chair power by the way it's fun I can now talk about the
fed
ORG
I wasn't allowed to talk about
fed
ORG
policy for
many years
DATE
you know I I guess my by most
Advice
GPE
to the administration is don't do anything to shock the economy So, they had been talking about raising taxes. They had been talking about making different changes. Now, now is not the time to put any additional shocks. Things like gas tax on the margin may help a little bit but this is really now the federal resource job and the administration needs to be Not to get in the way. I do think, you know, the number
one
CARDINAL
thing the administration can do And I think it's not just them. It's obviously other.
Number
one
CARDINAL
thing the administration can do And I think it's not just them it's obviously other world leaders is we need to find a political solution To this war. Military solution alone is is not going to be what stops this. You have confidence in chairman
Powell
PERSON
whom you know well Having work together with him and other members of the federal reserve the reality however is that financial markets aren't certain whether they have In
Sherman Powell
PERSON
there's a growing consensus that
the federal reserve
ORG
isn't raising rates fast enough Credibility with it's Perspective on inflation that it was transitory
Two
CARDINAL
questions do you think that
the federal reserve
ORG
needs to raise rates at a faster clip than they have outlined for the
American
NORP
public and for that matter for the world And Will it take to restore that last credibility Well, let me just say it wasn't just the federal reserve. The administration also Talking about inflation would be under control. So, you know, I think from the
Fed
ORG
stamp point Hindsight they clearly waited too long but having said that when you're managing the economy near the federal reserve I think you have to balance both sides of that equation I don't buy that the
Fed
ORG
has lost credibility I think the fact that the
Fed
ORG
moved in
75
CARDINAL
basis points which a
Ago
PERSON
is not what the market expected. I think chairpower is now signal. Another
75
CARDINAL
basis points. I think if you look at the dot plots which I never was a big fan of these dog plots but that's another story. You know, I think the market understands that expectations are the
fed
ORG
is the
Gon
ORG
na raise rates. I think the portfolio is just as important and they're they're beginning to slow that down. You know, look,
a year ago
DATE
, I said, we're gonna have
ten-year
DATE
treasuries,
three to three and a half percent
CARDINAL
and people fought that was really high. We basically have
10 year
DATE
treasures at
three to three and a half percent
CARDINAL
If the market really didn't have credibility in the federal the long end would be a lot hotter than it is. Even if
Europe
LOC
enters one he's still bullish on the region. Who have been
Ibrahim Al Mahmud
PERSON
To my colleague
Franci Laquar
PERSON
. We could go into a recession at some part of the world maybe in
Europe
LOC
I had commented that we might go into our recession in
Europe
LOC
because of the energy prices of pressure But also I have a positive review on
Europe
LOC
and General in the long term.
Europe
LOC
as a destination of a lot of talent They have a very good education system It's a tourist ticket destination as well And they have on top of this they have also an advanced program in the renewables and this is will give them an advantage over Other you know, countries. It might be a little bit difficult in
Europe
LOC
but in the long run I'm bullish about it. So is
Europe
LOC
at the moment your biggest worry but also your biggest opportunity if you look at the part of cash. How much you wanna put in
Europe
LOC
compared to other regions in the world? See from from
2018
DATE
once we have an answer or We are we were very vocal about our concentration in
Europe
LOC
. And at the same time we have said that we will not be stopping investing in
Europe
LOC
. We will be very selective. But we are going full speed and and the
US
GPE
market and
Asia
LOC
. We have a you know at a friend's
Location
ORG
in term of geographies and we would like to
Location
ORG
between the geographies. But again,
Europe
LOC
, we will not stop investing. We will continue investing. Where I have, I wasn't in
Europe
LOC
recently and I'm meeting and I have noticed a lot of activities and technology space There in
Europe
LOC
. I I think at some point it really.
I wasn't in
Europe
LOC
recently and I'm meeting and I have noticed a lot of activities and technologies based In
Europe
LOC
. I I think at some point you're looking for assets, infrastructure, assets in
Africa
LOC
. Is it still the case? Yeah, of course. I've been if we can deploy more in
African
NORP
and for a structure would be a fantastic. We have been investing and renewables as well and and
Africa
LOC
and we would like to do more It's it's a little bit in a slower pace and other you know a countries But we are trying to find our partner to deploy more in
Africa
LOC
. Anything with
Russia
GPE
so you you have an I mean actually AA pretty sizable and considerable assets in rush hour. What will happen to them? Status we are not investing more in
Russia
GPE
at the same time to be practical you cannot take it I know some some companies have announced to to exit it but and in reality they couldn't We are monitoring the situation in
Russia
GPE
. We are in full compliance with the international sanction. We are our team on top of this in a daily basis to make sure that there are I'm betting any any update on the sanction But we always wish and hope that this is will be settled very soon for the sake of the people of of
Ukraine
GPE
. Or are you in touch with the
Russian
NORP
government about some of these assets? Naturally right now but but you know we have a big a big investment in
Rosanov
PERSON
as you know
Rosenth
ORG
itself is not undersanction. Of course we have a fiduciary
2 hour
TIME
future generation of course we will be in touch of them for for the dividends that we we deserve But any further investment now What do you do with crypto right now? So, it was, I mean, it's up. It's down, depends on stable coins or or other ones. Are you interested? Send us a class? No, group
two
CARDINAL
, no. A blockchain yes But we have very clear review on this and and our team and and the technology space are exploring about opportunities in the blockchain. And that's all from
the Carter Economic Forum
ORG
right here in
Doha
GPE
. You can find complete coverage of the event including full interviews and articles. The destination,
Bloomberg
PERSON
. Com. This is
Bloomberg
PERSON
. People ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest investors in the world the people that I would like to have managing my money that the start of the internet Solution. I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio No one covers the world like
Bloomberg
PERSON
.
No one covers the world like
bloomberg
PERSON
. Seven% in
the coming months
DATE
do you see that coming true
24 hours
TIME
a day.
Bloomberg
PERSON
.
Bloomberg
PERSON
has enhanced search on the terminal to deliver what you need when you need it now you can simply type phrases in everyday
English
LANGUAGE
in the command line Compare financials People analyze Marcus You can enter phrases. Or ask questions What do you want to know
today
DATE
? Ask a question or visit search go to find answers now.
China
GPE
slows the
fed
ORG
worries and former President
Trump
PERSON
strikes back. I'm
David Weston
PERSON
. This
week
DATE
's special contributor
Larry Summers
PERSON
of
Harvard
ORG
on where the housing market is headed. I do think we're Words. In the future with respect to housing.
The Institute of International Finance
ORG
on the risk and the opportunity of zombie companies. Money that's being spent to keep zombie companies afloat is money that could be more productively deployed elsewhere. It was
a week
DATE
of signals. Some subtle and some not. Doesn't seem likely to fix. And she is confronting a number of both you know short term and long term challenges right now I probably the number
one
CARDINAL
thing is the poor performance of the economy. Former President
Trump
PERSON
kept up his attack on
Republicans
NORP
who supported his impeachment though Congressman
Liz Chaney
PERSON
of Wyoming said she wouldn't stop even after she was soundly beaten in her primary. I have said since
January 6
DATE
that i will do whatever it takes to ensure
Donald Trump
PERSON
is never again anywhere near the oval office and I mean it. And there was nothing subtle about the inflation signal we got out of
Great Britain
GPE
coming in
over 10%
PERCENT
I'd go to the
UK
GPE
where you're seeing an explosive move higher in
UK
GPE
guilt yields
Tom
PERSON
and I don't think I'm overdoing it using that language Becoming entrenched. Reading
the minutes
TIME
you have to feel that this is a sort of a doveish lean and it supports chairman
J Powell
PERSON
's tone at the news conference following the
June 27
DATE
meeting beneficials noted that some Of the economy notably housing we're starting to slow as a result of higher interest rates And if you wanted confirmation of just how big is those fed minutes were just take a look at the markets
this week
DATE
with the S and P
five
CARDINAL
Shooting up on
Tuesday
DATE
when you fall back down to earth and beyond on
Friday ending the week
DATE
down one. Two% at
42 28
DATE
and the Nasdaq was even worse again climbing nicely early in
the week
DATE
only to plunge on
Friday
DATE
ending up down
two
CARDINAL
.
Six%
GPE
help no doubt by And
just under three
CARDINAL
At
297
CARDINAL
. To help us understand what the market may be trying to tell us welcome to
Bob Prince
PERSON
he's co chief investment officer for
Bridgewater Associates
ORG
and
Ed
PERSON
Hyman share of Evercore ISI and vice chair of Evercore So, walk on both you back to Walsh St. It's really a pleasure to have you and let me start with you. You follow the economy and what's going on with the economy. We've talked about the markets. We've talked about the
fed
ORG
. What's the economy telling Well, the economy, it has
two
CARDINAL
parts to it. Obviously,
one
CARDINAL
part is what real GDP is or
The markets we've talked about the
fed
ORG
what's the economy telling us Well, the economy has
two
CARDINAL
parts to it. Obviously,
one
CARDINAL
part is what the real GDP is or auto sales and there's inflation An inflation is by far the more important part right now but on the
first
ORDINAL
part Economy is doing okay. As you know, we serve a companies And our retail survey dropped sharply
this week
DATE
but still pretty elevated Housing is really getting hit. But on balance economy is doing okay I think it's probably going
two
CARDINAL
or three% but headed to one% The recount. I'm sorry. Bank loans came out
this afternoon
TIME
and they're up
11%
PERCENT
now. And retail sales
this week
DATE
we're you know pretty decent On inflation which is much more important I I'm pretty convinced that inflation is slowing Of oil prices came down gasoline prices came down And In the weeds used car prices dropped about three% in
the latest month
DATE
And we survey Retailers pricing power that's now plunging you've heard the stories about the inventories being high and we've been tracking that for a long time it's now really coming down. But the most important part and we don't give my state on this or wages. And obviously the labor markets are very tight But they had from the conference board
this week
DATE
A measure of CEO confidence with almost a record low. And then another survey That showed
80%
PERCENT
of workers We're concerned about losing their job. Go figure that. But we serve a employment agencies
every week
DATE
And ask them among other things about wage pressure and that's now pretty clearly hooked down So I think you're beginning to see some moderation in wages on top of you know prices now cooling And economies calling So
Bob Ed's
PERSON
season started to come down. Questions how fast is coming down but starting to come down. How do you see it? And is it coming down enough and fast enough so the
fed
ORG
will not Much further in red hikes It's definitely on the down but the question is where is it settle out The markets are discounting The markets are discounting
two and a half
DATE
And you know we're coming down from six So, or higher on the core, right? So, but there are really
two
CARDINAL
big imbalances in the economy right now that are need to be resolved through this tightening cycle and we're we're still in this tightening cycle It's it's too early to really see the effects. It hasn't been that long to see the effects and so chances are you're gonna get more that weakness as you as you go along. But there are there are
two
CARDINAL
big imbalances in the economy right now that that they're gonna have to be All one is the level of nominal spending in relation to the to the output capacity of labor Over
the past year
DATE
, nominal spending is up
10%
PERCENT
. And incomes are up
10%
PERCENT
, and if incomes are up
10%
PERCENT
, that gets spent and you get more spending at
10%
PERCENT
. You gotta bring incomes down And if incomes are growing by
10%
PERCENT
but labor can only produce goods at the rate of four% you get a
six%
NORP
inflation rate And that's the basic that's the first imbalance and that's the basic cause of the inflation that we have right now. It's really not the supply chain. It's just too much spending Which came from the monetization of government data and the fiscal stimulation. The
second
ORDINAL
imbalance is the level of nominal spending in relation to bonyards. So nominal spending is even higher above bonus than it is above output. It's you know, seven, seven%, above bonus. So, it's the highest in
60 years
DATE
. So, if, if, if
Spanding
WORK_OF_ART
, if people's incomes are growing Well beyond bony yields it's very easy to make debt service payments and even if you lose your job or money prices go up or something you can get credit so that the the credit numbers it is referring to loans up
11%
PERCENT
You know that's a bad.
Loans up
11%
PERCENT
you know that's a back On the economy and spending. So, so it's it's the high level of spending an incoming relation to interest rates and and labor labor production And it's the availability of credit Sustain that. To bring about an equilibrium. Quickly there. It's one of the issues here. Where did you say that's the hardest get your arms around? Where are with wages and that wage price spiral? Because in fact, if we are gonna have continuation, people are gonna wanna make more money, they're gonna go to their bosses and say, you need to pay me more Well CEO's now really bearish So they're not gonna be happy. If you have a CO one but your
Bob
PERSON
and I think about the same way. But money growth has been slowing for
about 18 months
DATE
. We'll talk about that because it was growing gangbusters for a long time. Right. But you're saying it's turned around. So, in the conventional way, you had the checks you had the quantity of easing in low interest And some money growth got up to
almost 30%
PERCENT
. Which is obviously extremely fast and that's why you have the strong number growth. Now, with figures I got
this afternoon
TIME
on
Bank Deposits
LOC
,
Mardi Gras
PERSON
is well less than five% And so we've set up the mechanism for this novel growth which is way too fast To slow down but that's what has to happen and obviously, this is a really interesting thing. If it slows down, Come out of real growth or at a prices. If you have your
10%
PERCENT
normal growth which everybody can understand I think Right now it's about
one%
ORG
real and a nine% price right and if you go to say five% nominal What's the mix then? Right Should that fix the inflation problem or at least take us a long way to be fixing it That your total in an economy there your total sources of funds is your sources for spending and there are
three
CARDINAL
sources there's money There's credit and there's income Right? And so when you get to tightening a monitor policy, they're contracting money. And that's absolutely right. The
first
ORDINAL
effect of a contraction and money is on asset markets. Because if you think about the printing of money by the by the fattering of the central bank they print the money and then they go buy bonds or they print the money and that money then goes into stocks so that money had more most directly effects of financial markets Credit more goes in to spending, right? Because you know, you you take out an auto loan to buy a car, you don't take out an auto loan to buy a bond and the
fed
ORG
doesn't print money to buy a car, they print money to buy financial assets. So, so what you have is a push pull The contraction in liquidity from the central bank is a drag on the financial markets While they're expansion of credit Support the spending. And so you've got you got that work in both directions right now. Well, that's interesting to me at least credits going up. That sounds like it's good. It's gonna spur growth. But that makes Sound like that's actually gonna make me inflation Does the
fed
ORG
need the credit to come in so probably so in my view of it which is a straight
Milton Freeman
PERSON
take of it of those
three
CARDINAL
pieces that
Bob
PERSON
pointed out The
first
ORDINAL
one is where it starts. Is the money growth I track global short rates. It's a global economy and they've a higher impact on the
US
GPE
economy than fed funds and they've been going up for
about 18 months
DATE
. Same time that money grows has been slowing. So, I think we're pretty deep in this and we had a pretty good drop in the stock market to your point And and now, inflation's coming down. The markets are
Beginning
ORG
to think that this is In an introduction to the next chapter That the next peel of the onion. He's exact.
Markets are To think that this is Introduction to the next chapter That the next peel of the onion. Exactly right. So, the money is the
first
ORDINAL
thing, right? But what that and money is the first thing but it needs to get to the
second
ORDINAL
thing and the
third
ORDINAL
thing to have the permanent effects right which means Have to be in a tightening cycle for long enough for that to happen right and we've been in the tightening cycle for how
many weeks
DATE
? Right? If you look at
18 months
DATE
exactly. You have to be in a long enough, right? And so, you know, as we look forward We think that there's there's gonna be it's too early to tell really how this plays out in terms of whether it's wheat growth or high inflation or which one but Probably gonna get some combination of wheat growth, high inflation, and rising interest rates. Right And all
three
CARDINAL
of those are are rough on asset prices
Mix
PERSON
is gonna be determined mostly by how aggressively the
fed
ORG
And other central banks tighten and and stay tight if they have to pay the price of a downturn. Gonna turn next. So, what is really for investors? So, it's too soon to tell. What do we do in the meantime? Well, where do you feel those answers?
Bob Prince
PERSON
and
Ed Kimon
PERSON
will be back with us for more Wall St Week after the break. Companies now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be compre To the software that is reading it because that software or robot is gonna decide whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination. Really
FTC
ORG
I think for most the
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? New construction contracts faltered and while unemployment actually went down Significant was back to back
monthly
DATE
declines and paying jobs. The bottom line seem to be that the economy was beginning to move forward but with many are lagging part And overall at a pace that would embarrass a tortoise. That was Lewis Rockeys around Wall St wave back in
August of 1991
DATE
when
the United States
GPE
had just come off a roughly mild and short recession the number
one
CARDINAL
song if your murder was
Brian Adams
PERSON
everything I do I do it for you and the top movie was terminated too judgment day still with her Bob Prince of Bridgewater and Ed Hyman have ever courage so it's Bit of a different world
today
DATE
,
Bob
PERSON
. For example, on the job situation, we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are in the tightening cycle, what comes next?
Hey,
Bob
PERSON
. For example, on the job situation, we still have a pretty robust jobs economy but for everything we discussed before about the uncertainty of where we are on the tightening cycle, what comes next? What is that say to an investor? Well, right. Now, we're in that in between stage right now, right? So, you, if you, if you go back just to not too many months It became evident that we had a self sustained inflation that there was gonna be a tight near monetary policy the markets price that in yields went up You got to take me in a policy it's still happening
Marcus
PRODUCT
got a little bit excited about the dip and some of the inflation they start to bite on that yield But we've already given up
half
CARDINAL
of the yield rise that occurred and that actually means the
fed
ORG
needs to do more than if the yields had stayed up where they were, right? Including equity. So So we're still in this thing we're still in this tightening cycle And like I said they're they're really there's gonna be a mixture of
three
CARDINAL
things and you don't know what the mix is yet cuz it's too early to tell but you're gonna get some mixture of wheat growth high inflation and rising interest rates. The more the interest rates rise the more it's the wheat growth The less the interest rate rise the more it's the high inflation If they're
fed
ORG
takes the foot off the break you're gonna that that inflation improvement's gonna go away and you're gonna you know they're gonna favor growth so you don't know which which how they're gonna play it quite yet So, what we try to do in this kind of environment is is maintain some balance, right? Diversification, obviously, don't not too heavily committed to anyone direction but also even within the equity market You know structure and equity portfolios that have a Very aggressive that there's a strong enough balance sheet to hold that up to to sustain their They're they're positioning the markets or a sustain a positive cash flow and I think that their companies that are you have a lot of debt in relation to enterprise value or vulnerable profit margins that sort of thing. You know, are they are the type that are most vulnerable for that environment? So, it sounds like an awful lot hinges on the
fed
ORG
. Surprise, surprise.
Jackson Hole
GPE
coming up
next week
DATE
, okay? A lot of people are paying attention to
Jay Powell
PERSON
. We used to say, if we were
last year
DATE
at this, he was talking about transitory still. That doesn't work so well
this year
DATE
, right? So, how much Can the fed give us what exactly where they're heading and some of the questions that
Bob
PERSON
just talked about. Well, it's hard to hard to know. I do think we're gonna get a financial crisis somewhere. Pretty soon. Always been part of the of the tightening cycle But like you point out David, yo,
last year
DATE
, it was really about transitory. He had five You went through
five
CARDINAL
different things that were proved transitory I I personally think the fit is now on the other side of the wrong foot. Go to five% And I'm not quite sure what's happened but your money growth did slow dramatically Combined prices here and come down Dramatically I'm saying pricing power coming down and so I think we've made a lot more progress on inflation than I expected and and that's why the market was going up until
today
DATE
but that's that's if inflation keeps coming down then the market is gonna appreciate that.
One
CARDINAL
thing I don't understand
Bob
PERSON
we heard why
Ed
PERSON
thinks the
fed
ORG
stop maybe he's got a bit easier actually with some of the things that have happened but financial conditions Have not tightened. Actually, if anything, get that in someone looser. That makes the
fed
ORG
job harder does it now? Yes. The first half of the year literally
the first quarter
DATE
that the markets were doing the
Fed
ORG
's job entirely. Yeah. In the
fed
ORG
joined in It wants to fed joined in and the market saw some you know positive signs of inflation you know they actually pull back and so bonyards came back down equity yields you know came back down And so You know that as you said
about half
CARDINAL
of the tightening that the markets were applying has been retracted If yields had stayed where they were It would be that much less that the
Fed
ORG
needs to do
Were applying has been retracted If yields had stayed where they were It would be that much less that the
Fed
ORG
needs to do but the fact that the yields have actually dropped some and can kinda give it back some of the work that they were doing. It's that much more that the
Fed
ORG
needs to do. And so I think you know it's
Ed
PERSON
referred to last that you know you you raised it and then you know we talked
Last year
DATE
of
Jackson Holston
PERSON
but They were clearly wrong about transitory inflation if if you actually look at the indicators that they follow and they tend to be lagging indicators I haven't heard yet an explanation about how they think inflation, why they think there is an inflation, why they think that that was wrong, and I think that that causes some cause you to question How well this this process is gonna be manage it's gonna be very tricky You know from my vanish As you can see Fiscal stimulus quantitative easing led to a
30%
PERCENT
increase in the money supply and that did it If you look back at that
Jackson Hole
FAC
they completely missed that now money growth is plunging and can my prices are coming down all sorts of signs that an early signs and so the job's not over by any means. But there's progress and if you look back like pickate the 70s when inflation peaked The stock market started to respond to that. When you had a very high inflation period like we have now. Do you agree with
Ed
PERSON
that in all likely we'll have some sort of financial crisis? So that's what happening happens in serious tight Odds are pretty good, yeah. Yeah, I mean, we haven't had enough tightening yet to really have that. Odds are good. Yeah. I mean, we haven't had the downturn yet. If there's gonna be a downturn, it hasn't happened yet. It's gonna be hard to bring inflation down. Are you gonna bring nominal spending down from
10%
PERCENT
to five% Without a significant An incredible you need to slow credit growth by
about half
CARDINAL
money growth is slowed but you need to slow credit growth in
half
CARDINAL
but it's still rising you're gonna have to you're gonna have to hold interest rates up enough and that's when thing that's when bad things happen I have to tell you this is not Things. A real treat to have the
two
CARDINAL
of you here in Wall St. Really? Thank you so much. That is
Ed Himan
PERSON
. I've ever caught and
Bob Prince
PERSON
of Bridgewater. Coming up, we'll take a look at what's coming up
next week
DATE
on global Wall St. That's next on Wall St, on
Bloomberg
PERSON
. Access the financial world on demand. Hear from leading economists Policy makers And industry experts be alive and on demand webinars. Only from
Bloomberg
ORG
. Start exploring to see what's moving the markets. Visit
Bloomberg
PERSON
. Com webinars
Crypto
PERSON
Have a world of young people That want their own financial system. And their own culture. And it is very powerful. And I'm a big believer in it. Let's take a look at what's coming up
next week
DATE
on
Global Wall St
WORK_OF_ART
starting with Julia
Sally
PERSON
in
Singapore
GPE
.
This is all straight away. I'm
David Weston
PERSON
. Let's take a look Coming up
next week
DATE
on
Global Wall St
WORK_OF_ART
starting with Julia
Sally
PERSON
in
Singapore
GPE
. Thanks David after unexpected cuts to the medium term lending facility in
China
GPE
we'll be looking to see if the banks follow suit with a cut in the loan prime rate also on the
Slater
PERSON
interest rate decisions from central banks in
South Korea
GPE
and
Indonesia
GPE
inflation figures from
Singapore
GPE
and
Hong Kong
GPE
trade data Earnings across the region include
Qantas
GPE
,
Patro
GPE
,
China
GPE
, and food delivery giant meat one,
Bloomberg
PERSON
,
Intelligence
ORG
forecast,
Chinese
NORP
companies, maybe set to report their worst earnings
2 years
DATE
. In
Europe
LOC
for
the coming week
DATE
will be the energy crisis in
Europe
LOC
and we have a lot of developments in
the week
DATE
prior you had the
Ryan
PERSON
dropping to levels that made it untenable to have shipments across it you had record high energy prices in
France
GPE
and
Germany
GPE
you also had
Matt Gaps
PERSON
prices reaching you records as well so We head into
this week
DATE
. The question is going to be how this impact industry? How would impact individuals? Will there be more demand rationing and demand destruction? We've already seen some of it with different industry having to shut down power plants but how much worse can it get and what will be the impact on the economy? Big weekend economics we have
the Jackson Holston Posium
ORG
coming up and I think our
Bloomberg
GPE
economics team really focused to hear some hawkish comments from chairman
Jay Powell
PERSON
reassuring the markets there was no and that we are still to go in
September
DATE
for
50 or
CARDINAL
75
CARDINAL
basis points away from economics How do they sort of continue to grow in the face of further reopening trade maybe less demand for that product finally peloton we've heard a lot from this company about assemb Some of the bikes at home, a lot of cost cutting initiatives, all the help sort of get that company back on track. That too will be a key focus for us
next week
DATE
. Thanks to
Juliet Sally
PERSON
,
Danny Burger
PERSON
, and
Taylor Riggs
PERSON
. Well some of those who maybe caught are those so called zombie companies who've loaded up on debt when it was cheap. International finance. That's next on Wall St Week on
Bloomberg
PERSON
. Tag on the product may read made in the
USA
GPE
but the
Often
PERSON
says made in
India
GPE
.
Alphabet sun darp
PERSON
patchai
Microsoft
ORG
such a
Nadella IBM's
ORG
Arvin Krishna
PERSON
my crime technology
Sanjay Mayhotra
PERSON
and that's And that doesn't count
Indians
NORP
running companies all over the world. So many
Indians
NORP
risen to the top. So points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the
Really competitive education system. If you Technology it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make
Visas
GPE
for the
US
GPE
. It was nice while it lasted all that support from the
fed
ORG
from oh interest rates. Range for the feral funds rate to pumping money into the economy Enabled in large part by the financial backing from the
congress
ORG
and the treasury we will continue to use these powers forcefully proactively and aggressively until we're confident that we are solely on the road to recovery. All of which allowed companies to borrow as much as they wanted Was worrying to
Russ Costrick
PERSON
of
Black Rock
LOC
as much as
4 years ago
DATE
. The
800
CARDINAL
lb gorilla which eventually we're all gonna have to question is whether or not this build up in corporate leverage which we've seen over
the past 3 or 4 years
DATE
is that sustainable But now those happy
days
DATE
are over as the
Fed
ORG
has reverse course and says it will keep raising rates until the inflation dragon is slain. The idea that we are going to start cutting rates.
Early next year
DATE
, when inflation is very likely going to be well, well, well, inaccessive our target. I just think it's not realistic. Leave all those companies who've borrowed so much. Well, at least some of them are so called zombies. No not those zombies companies that don't generate enough cash to pay their debt and that leads economists like neuro
Robini
PERSON
to say we're going to see some of them fail which may just be what we need to get to the other side. You're tons of firms that were highly Zombie Now that we have to tighten Inflation is higher that zombies are gonna collapse. And to take us to the strange and exotic world of zombie companies welcome to
Sonia Gibbs
PERSON
she's managing director and headed sustainable finance at
the Institute of International Finance so Sonia
ORG
thank you so much for joining us on Wall St Week let me start with those basic questions what exactly is the zombie company and how many Are there out there
First
ORDINAL
of all, to take a step back. What you need to think about is that over
the past 10 or 15 years
DATE
, global debt levels have skyrocketed. We've had very low interest rates and for example, non-financial corporate debt around the world is now close to
100%
PERCENT
of GDP. And that's more than double what it
Decade ago
DATE
so that's a very worrying backdrop And so what we mean by zombie companies is a company that essentially has to borrow to keep going. They're highly leveraged. They're not growing very fast. They're revenues are not up to par. And at the moment they face a very difficult situation you've got higher input costs so your commodity prices are higher wages are rising at the same time you don't earn enough revenue to cover all of these higher costs and your debt service so if you have a ratio of re To interest costs that's
one
CARDINAL
or less if you can barely cover your debt service cost we call you a zombie company and it's a very good name it's very evocative And for how many amuse difficult to calculate right because for a lot of firms that for example art publicly listed the information might be less available they might be smaller non-public companies but the federal reserve has to mates that
between five and 10%
CARDINAL
of
US
GPE
for
Photo reserve estimates that
between five and
CARDINAL
10%
PERCENT
of
US
GPE
firms fall into this category It's also important to remember that this is not a static world. It's not once a zombie, always a zombie. Conditions change and in fact, becoming a zombie company is a little bit cyclical. In the sense that when times are good, maybe interest rates are low, growth is high, maybe you're not a zombie. But then, you know, bad things happen. Pandemics happen. Shocks happen. Interest rates go up And a company that was formerly doing reasonably well Might suddenly fall into the zombie category. So so you mentioned the overall debt load it's true certain
United States
GPE
and not just in
United States
GPE
in part because interest rates are so low there's some very very successful healthy companies that loaded up on debt cuz it was so cheap but and whenever we've talked about this risk in
the last few years
DATE
I said don't worry as long as interest rates are low we're fine it looks like those days maybe on their way Higher interest rates. So, what kind of pressure is that put on these zombie companies? Well, I think it's AA good analogy, right? It's all fine until it's not. And so you've had a kind of a confluence of factors that have hit. Pretty much at the same time, you had a pandemic which hit growth. You had commodity price shock, you have writing inflation, you have Interest rates and you also have firms who's who's business models for example have been entirely changed by the pandemic. I mean, amongst the list of zombie companies you might find a company like we work. You know, a company that has been very successful but at the same time, the pandemic has changed a lot of things for that for that company. Cruise lines is another good example of a type of company who's now in the zombie category or some of the meme stocks. You know,
AMC
ORG
, your game stop. So, these are really household names Think that the difficulty is at a point in time when you've got wages rising when you have higher input costs these firms may not be able to borrow as much as they need to borrow to keep afloat Tend to find zombie companies concentrate in certain sectors or in certain size corporations So I think it's fair to say that the the sectors that are worse off in terms of percentage of zombie firms are probably in manufacturing and in retail and retail of courses industry that's undergoing secular change over the long term as we move to sort of more online no less brick and mortar think there are there are underlying structural issues there and in Sector in any case but I think some of the companies that are hardest hit tend to be smaller firms and if you think about a small company, there's sort of inherently face greater credit risks than some of the larger, better established companies that have long standing histories and track records in borrowing. They're, you know Familiar to investors smaller companies have a harder time accessing funds especially when when borrowing conditions are difficult and with some of these companies having fallen on hard times during the pandemic You know, there are estimates that suggested in some cases as much as 25,
30%
PERCENT
of the small cap companies, especially if you include unlisted companies, could be falling into this sort of zombie trap. I wonder saying about the larger effects on the economy. Obviously, we don't wish ill for any corporation but there's gonna be a lot of stress put on a lot of the companies you're describing right now. And so far is that all gets sorted out to use a eufacism perhaps. Is there some benefit for the economy and redeploying the capital they represent into things that might be more productive than Enterprises. I think we might wanna think about this in a short term and a long term context. So in this short term It is very helpful for the economy to keep these companies afloat and you could think of the example of
Japan
GPE
here which is spent over
800 1 billion US dollars
MONEY
since the pandemic hit to support its companies so you avoid bankruptcy, you keep people employed, you keep these company afloat, but there's Longer term cost to be paid for that because when you think about it money that's being spent
Zombie
PERSON
companies afloat. That could be more productively deployed elsewhere. You could put it into capital spending. You could put it into infrastructure. You could put it in a new industry, new technology, maybe in the ESG world or or green technology.
Put it into capital spending. You could put it into infrastructure. You could put it in a new industry, new technology, maybe. In the ESG world or or green technology that can really deliver a boost to productivity and growth. So it's kind of a foregone opportunity in that sense. At the time for the reason you describe and the example of
Japan
GPE
is a good one. It strikes me. There are political consequences of letting zombie companies go belly up. You know, the the politics of these things are are always difficult, right? I mean, one of the the conclusions that you can come to is that if you have High proportion of of zombie companies if you have companies that you're worried about keeping afloat there's political pressure to keep that going The more that borrowing cost rise, the more the interest rate rise, the harder time these companies will have keeping going. So if you're in a world where inflation is rising and you have central banks having to make a very difficult balance Controlling inflation and supporting growth which can involve supporting some of these less profitable companies. You know, it's a it's a it's a rock and a hard place. You know, where do you, where do you draw the line? You if in fact the
fed
ORG
could be held responsible for this many as I'll be company and maybe it's not what they're intent but it's certainly was a consequence of extraordinary low interest rates for a long time. Oh, I think ultimately, it has arbitraries of the price of money. You could hold the
fed
ORG
responsible for everything really but certainly, it was an inadvertent consequence Of low interest rates. So I mean if you think of the the many many years when we had low and in some countries even negative interest rates there were warnings sounded all the time. There are risks to financial stability. There are risks to long term growth. It's going to stoke inflation. It's going to distort financial markets. Is disto Acid valuations And in fact you can think of zombie companies as a type of distorted asset valuation right because a company that cannot generate enough revenue to support its debt service and it's running costs arguably is trading at an inflated valuation because it can continue to borrow at low rates so you
Sort
PERSON
of put it on the backs of central banks but it's it's certainly an inadvertent consequence of something that had to be done to keep growth going during the the after the financial crisis International finance. Pleasure to be here.
Larry Summers
PERSON
of
Harvard
ORG
. This is Wall St Week on
Bloomberg
PERSON
When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significantly more impactful.
Continuous
PERSON
shipping is the key component of global trade about 80 or
90%
PERCENT
of all the world's goods that transported sea at some point. But there's a significant unseen cost to the modern era of global commerce. About three% of all the world
Output of Germany
FAC
. Since reducing trade isn't a likely option. What about a technological improvement? To help reduce the emissions from these well stocked maritime behemoths.
Larry Summers
PERSON
of
Harvard
ORG
.
Larry
PERSON
, thanks so much for being back with us. So, let's start with those fed minutes that everybody was waiting for eagerly and they came out Markets didn't know quite what to do with them what did you make out of those minutes They confirmed what I suspected Which was that the
fed
ORG
doesn't know where it is That the world is very ambiguous that this point And A meeting or a very poor way to convey
Collective
PERSON
message Look the
Fed
ORG
has a fundamental problem About which it is not yet willing to be realistic And that is that it is exceedingly unlikely That inflation can be brought down to target levels Without a substantial increase in unemployment they To be Unemployment and And the reality is that it's probably not so realistic to think that they're gonna get inflation all the way down without getting unemployment up They don't wanna acknowledge that and that forces a certain confusion I into all of their statements I can sympathize and understand why they don't want to acknowledge that part of the problem is they've taken on an excessive obligation To communicate A very very difficult situation I don't know to what extent they're gonna choose to take the pain that is ahead on the stag side and to what extent they're gonna choose to take it on the flation That To be seen They don't really know either which way it's going to go Gotta worry them. That Than they were when the
fed
ORG
last met. And Middle of a tightening cycle Substantially loosening Ask to make a central bank nervous David there's
one
CARDINAL
other aspect of this situation that I think Very important and under recognized And that is because everybody focuses and focuses rightly on the geopolitics. What's happening with
Russia
GPE
and
Ukraine
GPE
, what's happening with droughts, all of it. They don't really fully internalize that oil prices and wheat prices have both come down substantially at our predicted Substantially in the future. Concepts of core inflation When headline inflation was higher than core inflation Can't stop doing that when headline inflation is lower Then I inflation With respect to core inflation Mean Measures And so I think we've still got a substantial inflation challenge ahead of us. One of the things that
fed
ORG
emphasize in the
minutes
TIME
besides really being
Substantial Inflation challenge ahead of us. One of the things that
fed
ORG
emphasize in the minutes. Besides really being concerned about inflation expectations. On the other side of that was a softening housing market. Something you referred to
last week
DATE
on this program. Give us your take of the housing market. Some people say, we're in a housing recession right now. I think you have to distinguish
Movers
NORP
from stairs or to put a differently you have to You have to think about what the right way to look at rents is. Here's what's true What's true is that last year People who were signing new leases We're buying new homes We're paying
15 or 20%
PERCENT
more than they had
a year ago
DATE
Nothing like that Fatty into The consumer price index or the feds preferred measures a
PCA
ORG
Index All the fed through The small fraction of people who saw their rents change And a constant rent for everybody else. What that means is that down the road like now You're seeing inflation Although they still are going up at a reasonable rate Substantial increases and so we're gonna see significant housing price inflation in the measures of inflation that are used For
another 6 to 9 months
DATE
that's a different thing than what builders are responding to builders aren't responding to that builders are responding to what they think the price of houses will be
a year from now
DATE
and that
Calm
PERSON
down and so we're seeing Slowing in And that's what happens when When interest rates go up in some ways it makes sense if we're gonna have a decline in economic activity Better to have a decline in something where we've already got a huge stock of it and it's only the new flow that's being affected Van The in something that we need to consume A continuous basis That doesn't have any duration to it But I do think we're
Hordes
ORG
, In the future with respect to housing and I'm sure they'll be differential impacts in different parts of the country as I say my best guess is that we will have a meaningful recession sometime in
the next 2 years
DATE
And if so, I think there's considerably more pain with respect to housing ahead.
Larry
PERSON
, we're gonna talk about softness and slong. We certainly saw that in numbers coming out of
China
GPE
at
the beginning of this week
DATE
. And I wonder what you make of the
Chinese
NORP
problems as we know there are
three
CARDINAL
or four than their inner lock there. But on the other hand Is it possible that we'll give a little at least a little relief to the
fed
ORG
here on slowing inflation Probably will It goes back to the issue we discussed
a few minutes ago David
TIME
, about oil prices and grain prices
Main
ORG
impact of
Chinese
NORP
slowing Likely to be How much weight those should be given as we think about our inflation rate in this country but it probably is a positive On inflation How we see
China
GPE
in the future and how
China
GPE
will be responding to these economic difficulties. These has i've been saying now for some time are looking like increasingly profound events in
China
GPE
It was taken as almost axiomatic Hey Facebook
Increasingly profound events That at some point the
Chinese
NORP
economy would surpass the
American
NORP
economy Total GDP at market exchange rates that's now
Challenges
PERSON
for
China
GPE
there's the huge financial overhang there's the where the growth is going to come from there's the growing communist party involvement Wider range of enterprises The demographic Some of the economic forecasts about
China
GPE
in
2020
DATE
in the same way they looked back at economic forecast For
Russia
GPE
that were made in
1960
DATE
or for
Japan
GPE
that were made in
1990
DATE
. Last one here toward
the end of the week
DATE
turkey central bank made a move to try to combat inflation by you won't believe this cutting the interest rate from
14 to 13%
PERCENT
this course is part of
Urban
ORG
theory of interest rates What did you make of that? President
Erdogan
PERSON
is the world's
first Practical
ORG
modern monetary theorist. He is putting modern monetary theory into effect So far it hasn't worked very well For him Or for the
Turkish
NORP
people I don't think that's going to turn around And I hope that the misguided accolades of modern monetary theory in
the United States
GPE
are watching. Okay Laurie thank you so very much that's
Larry Summersville Harvard
PERSON
our very special contributor here on Wall St week. Yes
Richard
PERSON
. That's next on Wall St Week on
Bloomberg
PERSON
. Can Griffin is moving both sit it out and send it all security is to
Miami
GPE
this group was broken by
Bloomberg
PERSON
's
Amanda People
PERSON
ask me all the time what is the key to being a really good investor I tell them it's the surround yourself with and work with the best investors you can find on
Bloomberg Wealth
PERSON
I'm gonna take you to meet the greatest ambassadors in the world the people that I would like to have managing my money that the start of the internet revolution I kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution. Neutral Step by step electrify everything and what does that mean Finally,
one
CARDINAL
more thought. Getting old. It's
one
CARDINAL
thing that we all have to do Of us wants to think about it. And sometimes seems like some of the oldest among us may be the deepest in denial. Where there is rock musicians like
Mick Jagger
PERSON
still performing live on stage at
the age of 79
DATE
or sir
Paul McCartney
PERSON
who's still Political leaders in or nearing their
80s
DATE
like President
Biden
PERSON
and
Mitch
PERSON
And
Nancy Pelosi
PERSON
who snapped back at a reporter
10 years ago
DATE
when asked a question. Hey
President
Biden
PERSON
and
Mitch McConnell
PERSON
and
Nancy Pelosi
PERSON
who snapped back at a reporter
10 years ago
DATE
when asked a question. Colleagues privately say that you're just getting to stay on And who can forget President
Ronald Reagan
PERSON
who in
1984
DATE
provoke the age old or should I say old age question after stum Through his previous debate with
Demo Only
ORG
to come back with this zinger. I will not make age an issue of this campaign. I am not going to exploit for political purposes. Opponents youth and inexperience. The world of business and finance is an entirely immune from this but by
Warren Buffett
PERSON
who at
91
CARDINAL
shows no signs of stepping down and told our own
David Rubenstein
PERSON
his goal is to keep Quite like to be the oldest man that ever lived actually And who knows maybe we don't really just get older. We get better. For those who is hoping that that may just be true. We now have a concrete, provable example, coming from the world of golf, where a journey and tour professional who struggles for
years
DATE
, suddenly became Simply by turning
50
CARDINAL
pushing him Older player PGA tour champions league From
New Zealand
GPE
happened to be at the very top of his game when his birthday came around but according to
the Wall St Journal
ORG
adding that extra year has let Make in
1 year
DATE
$
three
MONEY
.
5 million
CARDINAL
which is more than he made in all the rest of his career put together and if he keeps sinking extra long putts like he To win the
Boeing Classic
ORG
. That does it for this episode of Wall St Week. I'm
David Weston
PERSON
. This is
Bloomberg
PERSON
. See you
next week
DATE
. Hey Important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure for something Universally important to human life as sleep mysteries surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our It's easy to memorize things that makes you smart if you can spit it back a lot of facts but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what your brain figures out while you're sleeping. BSO now is your online home for
weekly
DATE
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ORG
and
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ORG
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ORG
Hey flashing is a terrible thing inflation you could tower. Can you think about bitcoin I don't think it's a currency I think it's a commodity
today
DATE
we're in an everything vault I'm
Eric Schatzker
PERSON
and welcome to
Bloomberg's Front Row
ORG
.
Today
DATE
, I'm talking to
Jean Hines
PERSON
, the CEO of
Wellington Management
ORG
.
Boston
GPE
based
Wellington
GPE
is
one
CARDINAL
of the world's largest asset managers with
almost $one
MONEY
.
30 billion
CARDINAL
of investments. But because it's a private partnership the firm has been shrouded in mystery.
Jean
PERSON
is changing that. She's also making ESG investing one of
Wellington
GPE
's top priorities. Sustainability will transform the structure of financial markets. We don't think it's wolf. We think it's part of like a very, very important part of studying the In the risks that of of
5000
CARDINAL
companies. Is that to say there's alpha and ESG or alpha and sustainability? Yeah, absolutely. You believe that? I believe that.
Jean
PERSON
and I explore the strategies and perspectives that make
Wellington
GPE
different and are defining her tenures CEO. Why she's still believes in globalization and having a presence in
China
GPE
The virtues and challenges of active management. What to expect from
Wellington
GPE
's expansion into alternatives? The value of staying private. Here's my conversation with
Jean Hines
PERSON
.
Jean Wellington
PERSON
.
One
CARDINAL
of the world's largest investment firms. But To
Black Rock
GPE
, Sidelity Vanguard I could name others of course It's hardly known And certainly not well understood. Why? For a long history, we have had a very low public profile. So, that that would be number one. I would say another reason is that we are a sub advisor. So, our largest business one of our largest businesses to be a sub advis Other companies that are well known household names such as
Vanguard
ORG
and
Fidelity
ORG
and T Row price for example. So, we would we don't we don't market directly to consumers. We are the content provider. So you combine those
two
CARDINAL
that we're not, we're not actually, we're not a household name, brand name, but in also at the same time, we had a very low public File. Probably the reason most people don't know us. Is Public profile flying under the radar if you like being a little mysterious good for business a competitive advantage. It probably served us well overtime. I think for our current if you look in
2022
DATE
why am I talking to you
today
DATE
? I think the main reason is because we're a subvisor and we rely on partners. We're finding that it is important that that our brand is known for our content. I think Very importantly and maybe even more importantly I also think it helps with talents So, it's very interesting that you know, for
years
DATE
and
years
DATE
and years, we would be, we would try to have track talent and known would ever know anything about And that served us that was fine when we were a
Boston
GPE
based company but when we began to globalize and and begin to hire investors all over the world that didn't serve us well. That's been a big change, hasn't it in the asset management industry, the importance Having a brand. Most of the asset management industry has made a bet. Yeah. On sustainability. Yeah. But suddenly ESG is is under attack Right there are state governments. Here in the
US
GPE
that are waging war on sustainable finance. They they they're calling it wokeism. What do you think of that? We're not investing on the same ability from a value based perspective. We're investing in our capabilities from a how do we research companies? How are these companies earnings gonna how what are the risks to the From ESG factors. What are the opportunities for companies from an ESG factor? So, we don't think it's woke. We think it's part of like a very, very important part of studying the
Sat
ORG
in the risk set of.
ESG factor. So, we don't think it's woke. We think it's part of like a very, very important part of studying the In the risks set of of
5000
CARDINAL
companies. Is that to say there's alpha in ESG or alpha and sustainability? Yeah, absolutely. You believe that? I believe that. The alpha will all be in the nuance of company research. You know, what, you know, which company is in Life science tools industry for example are going to create products to help
Biologic
PERSON
manufacturing. Be less admitting. You're only going to be able to figure that out by meeting with
20 1000
CARDINAL
companies like we do every year. So the the antithesis if you will of like building a momentum model and back testing it. Of what the factors were in
the last decade
DATE
. Almost every CEO. In almost every industry. Grew up believing that globalization was good And globalizing has been a priority. Yeah. Of
Wellington
GPE
's for Yeah. Is that still the case? Yes I would I would suspect that as at the end of my tenure at
Wellington
GPE
instead of having
30%
PERCENT
of our employees in
Europe
LOC
and
Asia
LOC
it could be closer to
40%
PERCENT
of our employees so we are And intentionally
Continuing
GPE
it to invest it in our offices around the globe but you're right the deglobalization is we're in a period of regime change and deglobilization I don't think that necessarily impacts our business into the extent that there is great investment talent all over the globe. Really great investment talent. We're we're we don't have
Monopoly
PERSON
of investment talent in
Boston
GPE
and that clearly wasn't the case. You know, the reason we began to globalize our investment platform is is that the world was expanding the number of companies that were in
Europe
LOC
and
Asian
NORP
. Who are we to say that we're gonna follow all those from our
Boston
GPE
office That was the reason we began to expand and I think that is still true that we are is the global firm. This is a global economy and even if if there are certain trends that are deglobalizing. There is still a world there for us to either think about from a company Perspective or think about from a from an economic from an economic perspective.
China
GPE
has become And is still becoming an increasingly complex place in which to do business. How do you manage that? So, we have a presence in our
Hong Kong
GPE
office and we have a small presence in our
China
GPE
and in
China
GPE
Rashang High office. We are expanding our license to be able to invest in in the onshore
China
GPE
. Right now, it's small. Bowls an important place for us to do research are you already starting to do anything differently because clients are Concerned about inflation because of the impact on their portfolios of rising rates because of the potential for a recession Long lived that maybe. Oh, I think our clients have not made major changes. There's definitely more interest in our our commodities capabilities, our inflation capabilities, our value, investing capabilities, which have been out of favor, and unfortunately, for, for us, we continue doing Those teams. Have had in the past. Satellites have proposal systems they can kinda move to get out of the way of each other or change their orbit a little bit it's a service that you guys offered to help these companies know how to maneuver them machines Yeah, we offer a collision avoidance survey. It's a subscription service. We'll send you an alert
up to 7 days
DATE
in advance. If you're satellite's gonna come dangerously close to a piece of debris or another satellite. Companies will be doing that for
decades
DATE
moving. Satellites around but it's it's sort of like a harder problem now. The risk of a collision is a lot higher now just because we've installed so much more hardware in the space. Are you have a big collision it creates a cloudy debris and now all the other satellites are flying through this wizing mess of debris as we add all of the new satellites into space the risks of the collision the likelihood of the collisions going up
Collisions going up.
David Weston
PERSON
. We think that's the next secular shift. Yes it's about renewables. This is a level of uncertainty that we haven't had to deal with. Television and radio
Wellington
GPE
is an active manager. Texting? No. How come that's not our core skills that going back to what is our core skills that our core skill set is being a research based And having these teams of of portfolio managers with different skill sets that practice their philosophy and process There were research based content company generating insights about the world. Let's completely opposite of passive investing. Am I correct in saying that the implicit promise to investors in actively managed products? Is that they'll either get alpha? I'd beat the market. Yeah. Or better risk adjustive returns. Yeah I I think for us that it would I think Clients are asking for both of us, right? Hey portal call
Alpha Alpha
LOC
and risk adjustive returns and that's post a full financial crisis risk the pathway returns has become more important but you go back to the basics if you can generate
100
CARDINAL
basis points of alpha a
200
CARDINAL
basis points of alpha Indesease that is a tremendous compounding effects. The reality, however, is that across the asset management industry, the active. Yeah. Investment management industry. Is oh or sometimes negative after fees and the returns aren't any better on a risk adjusted basis. So, if that remains the case, what is the future for active management? We need to earn a return. We need to earn it. We need to earn that alpha. So, that's that's what we're trying to do. We're trying to we've created an environment where we have this and I I do mean this. We Incredible investment ecosystem. We have an in this
600
CARDINAL
person investment ecosystem that that collaborates that shares ideas that we're different perspectives different opinions on the same subject are welcome and thrive if we can continue to do that and that's that that's the input like can we do that then hopefully our output over We'll generate those returns. Private assets and alternatives are still a small piece. Yeah. Of
Wellington
GPE
's $
one
MONEY
. 20 billion in In a
UM
ORG
. How do you grow those parts of the business? Yeah. When the competitors are large? Established and in many cases excellent at what they do. To the private business in
2014
DATE
and so our
first
ORDINAL
fund, our
first
ORDINAL
, first group of fund is now on. It's
fourth
ORDINAL
fund. So, we. Yeah so we have
four
CARDINAL
by
the end of this year
DATE
we're gonna have
four
CARDINAL
platforms growth equity Biotech climate technology and investing in diverse founders. So, where else can we go? So, that's the question like, where else are we? What are our ambition? Yeah, where else does it where else can we go? We have a very Public footprint credit. So, there are areas that we should play on the private side and credit. To be successful, we don't have to be, it's not about being number
one
CARDINAL
or
number two
CARDINAL
. It's about growing that part of the business and generating great results for clients that help, that help the overall business. The same is true on on real estate. So, we have a very strong structured debt Capabilities as well as real estate equity capabilities. So, can we attract talent to help us all the compliment those on the public side? You know, longer term, we we have we have a we have One hybrid fund. You know, you could envision us having hybrid funds by sector that could that like that's like a natural extensions. We have such strong sector teams. So, those assets are what right now. All together by
the end of the year
DATE
they should be
seven
CARDINAL
or eight
1 billion
CARDINAL
so a small part
Strong sector teams. Are what right now Altogether. Of the business. It's privates and alternatives. Privates and alternatives are
seven to eight
CARDINAL
. The liquid alternatives. We've been in that we've been in the long short business since
1994
DATE
and that that business is
approximately 30 1 billion
MONEY
. Okay. So put them together in your getting close to
40
CARDINAL
. Any people In your position who started out As administrative assistants. Yeah. And
Rose
PERSON
to become CEO at the same company. Really, the only place you've ever worked. Tell me your story. So, go back to college. So,
first
ORDINAL
of all, I my parents were
Irish
NORP
immigrants. My mother raised
six
CARDINAL
kids and my father was a brick layer. So, I didn't know anything about the stock I would say they were very focused on education and so I Practically a full scholarship to
Welsie College
ORG
. Which was an amazing experience. In in as one of those one of the classes I took which was in my junior year it was sociology. It was a soci That you had to get a job. I recall it has a class you have to take. This was the class you had to take. But I just happened to get a job at a brokerage firm in
Boston
GPE
. And so that was my
first
ORDINAL
introduction to the stock market and I did not like the cold calling part of the business but I was just fascinated by the stock market and that's how I found my way to
Wellington
GPE
and
Wellington
GPE
was just beginning to expand they were higher higher in college graduates as administrative So that story. Start to manage money. Yup. And at what point did you realize that this firm was interested in cultivating you as a leader? So, I started managing money in
1997
DATE
and so and every year from then, I began to manage more money in
1999
DATE
. I I was able to run a
Tech
ORG
portfolio
2000
DATE
. Health care fund. And then
the decade of
DATE
the
2000
DATE
's was really like honing those research. Those portfolio management skills. Hey Again, my leadership journey right around the time I moved to
London
GPE
. So, I moved my family to
London
GPE
in
2007
DATE
and 2008 as we began to globalize our investment platform. It was really about culture. It was also becoming more independent from my cocoon here in
Boston
GPE
. I'm from a very large
Family
PRODUCT
. A big
Irish
NORP
family. I had I had my my my life was planned out. I had social events all the time.
Barbecue
ORG
's here. So I actually do think moving to
London
GPE
. Being alone with my small family unit. Away from the person I worked with for
16, 17 years
DATE
, was the beginning of my leadership journey. And then I became managing partner in
2014
DATE
. You're still running the world's largest health care fund. Yes. How's that possible? Managing
46 1 million dollars
MONEY
With all the research and all the analysis that it takes to stand top of such a complex industry set of industries really. What also being the CEO? Yup. And while also being I hasten to add a mom to
four
CARDINAL
daughters. How do you do that? So, everyone has super strengths, right? Everyone, everyone, everyone has super strengths.
One
CARDINAL
of my super strengths is your superpower. Superpower is organization. Superpower and processes. I think it would be it would probably be impossible. Companies now they're getting
hundreds
CARDINAL
maybe even
thousands
CARDINAL
of applications so softwares come in to automate the process you wanna write your resume for robots not for humans the only job your resume has is to be comprehensible to the software that is reading it because that software or robot is gonna decide Whether or not a human ever gets their eyes on it. Concerns about how this technology could exacerbate discrimination.
Segment of the population that might not be totally inclusive or not be Concerns about how this technology could exacerbate discrimination. The
FTC
ORG
needs to be making sure that we're fully understanding this technology. We don't trust companies to self regulate when it comes to pollution. We don't trust them to self regulate what it comes to workplace comp. Why on earth would we trust them to self regulate
AI
ORG
? We've talked About The virtues of being a private partnership Have you ever wondered to yourself of
Wellington
GPE
would be better off Public company? No. Why not? I've I follow public companies my whole career and from a lot of public companies you have to really focus On And it's more short-term focus than it was
15 or 20 years ago
DATE
and the best companies continue to operate with a long-term focus. Our private partnership just allows us to be long-term focused. The other question you would ask, what would ever make us go public? It would probably be some dramatic In the industry where we need a capital in a way we don't need
today
DATE
. This Makes a lot of money, doesn't it? Alpha for our clients. It is a profitable business I was Fishing for something a little bit different which is along the lines of this. There aren't many. Public betrayed companies. Yeah. With Acids under management in the neighborhood of
Wellingtons
ORG
. Only handful. But they make You know those with a
one
CARDINAL
handle on the
trillions
CARDINAL
Make somewhere between one and
three 1 billion dollars
MONEY
a year. In net income Is that ballpark for
Wellington
GPE
too? Get me there. It's a nice try. Say is that we are we participate in the asset management industry We have a You know a similar We don't have the we don't we are we are an investment management business so we order fee for managing the money we're not we're not heavily distribution oriented business. All of our compensation though is geared towards performance. So everyone at
Wellington
GPE
will do better if we For clients and that's the key. How do you decide who gets paid what? Other part of our partnership the
three
CARDINAL
managing partners which I've been one since
2014
DATE
this tribute or determine the profit how the profits are split at the firm so you have to imagine it has to be tremendous trust in the
three
CARDINAL
mansion partners and that trust means I know they're they trust us to know what's going on Business. Who's having impact that we're not gonna play favorites? That we're gonna be really fair. The path to partners have been the ability to become a partner at
Wellington
GPE
. A really critical part of our Talent has always been
One
CARDINAL
of the hardest. Maybe the hardest problem to solve for any investment business. And that was true before the pandemic, right? And the demands that it has created for flexibility and the demands that it has created for diversity. How hard is the talent problem now i think the pandemic has shown us and it probably should show most companies that it's not about buildings it's about the culture it's about shared values In the future we're gonna be more flexible about where our talent sits how much of
Wellington
GPE
On the jeans, hinds era. Yeah. The CEO. They'll say you accomplished what? That we continue to hire amazing talents We have made our collaborative investment ecosystem Stronger and that we we have it been a firm that's growing so we've been able to expand the partnership and that we are delivering most importantly we're delivering Read outcomes to clients and maybe finally it's like to like it's more about like I do the previous CEOs of Don and figure out ways to strengthen
Wellington
GPE
so that it's That it we have another 40
50 years
DATE
that that the next set of CEOs can continue that this is a now this is a I'm just passing through in a steward of this firm that you know my
almost 40 years
DATE
here whatever whatever I retire that that I will know with you know know that this will this Will be very strong for
the next 50 years
DATE
. Thank you very much. Thank you
Eric
PERSON
. I really really enjoy our time. Tag on the product may read made in the
USA
GPE
but the sign on the CEO's door often says made in
India
GPE
.
Alphabet sun
PERSON
darker And that's just a start. Added the cheap executives of
Adobe
ORG
Deloitte Gap VMware and that doesn't count
Indians
NORP
running companies all over the world Why have so many
Indians
NORP
risen to the top?
Coastal
ORG
points to
India
GPE
's incredibly competitive education system. If you can survive the pressure it takes to get into one of
the Indian Institutes of Technology
ORG
it gives you confidence to handle
American
NORP
universities and later at the business world. Meanwhile the belief in
India
GPE
's ability to produce so many tech wizards is reinforced every year
Indians
NORP
make up
Three fourths
QUANTITY
of the immigrants receiving coveted H
one
CARDINAL
B visas for the
US
GPE
and it's a Talked early enough all these precious materials you were just mentioning and we won the lucky side that our prognosis was spot on in a way forecasting what kind of material we would need and what quantity we would need. So Life you're the CEO of Roblox but on Roblox you're builder man. Maybe. Know that name we just started up Is maybe
2 weeks
DATE
after we launched and we're all picking our own used
You know that name we just started up Is maybe
2 weeks
DATE
after we launched and we're all picking our own usernames Everyone picked the one I just said. No, they're mad. So, you've had the same avatar since
2004
DATE
. That's right. That's awesome. Do you still play? I wish I could play the whole day I have to be a CEO So how often do you play? I'm probably on everyday but not as much as I would like. I have
four
CARDINAL
kids. On Roblox a lot. He said, his favorite games are the Tycoon games. Lumber tycoon theme park tycoon. I love those. I love all of those. I have a bit of a theory. I have
four
CARDINAL
kids. Oh, you do? Yeah, they're now in they've grown up watching me do this. Yeah. Another, they're pretty savvy, social media people, but I'm optimistic someday. They're gonna be Roblox for some other reason like communicating or more working or something like that and then they're gonna be oh gosh it's like forest to be on robots. It's a Port Monto of robots and blocks where users can build and play games in a threeD world Global online gaming jogger knot that kids are obsessed with to the tune of
10 1 billion plus hours
MONEY
a quarter. In fact roadblocks was building the metaphors long before
Mark Zuckerberg
PERSON
claimed a new name for Facebook. But what does the future metaverse really look like and how do we cultivate a civil digital society within it that keeps kids safe? Joining me now on this edition of
Bloombrook Studio
ORG
100
CARDINAL
. Roadblocks CEO and co founder
David Buzuki
PERSON
David's so great to have you here. I really appreciate it. It's wonderful to be with you. Well, I'm a parent. I'm a mom and so I'm been really excited to have this conversation. For parents and anyone out there who still doesn't quite What exactly are kids doing on
Rob Yeah
PERSON
kids on Roblox aren't just playing they're learning they're hanging out together Can't be together in real life. They're hanging out on roadblocks. They Playing hide and go seek they could be pretending they're running a store or a pizza parlor they could be making the next big game or adventure so it's really a wide range of things and it involves doing things together pretending you're together Right now it's mostly Games or experiences
four
CARDINAL
kids buy kids how old are these players how old are these developers we have young players who are getting interested in coding who are getting interested in designing things but more and more the community on Roblox is blossom into this super rich eco Them
thousands
CARDINAL
of developers making a living on the platform some of these developers are making
tens or 20s
DATE
or
50 millions of dollars
MONEY
a year so how many of these developers are really kids and how many of these developers Now, grown ups. Yeah, well, think
two 1 million
QUANTITY
plus developers. A lot of them are grown ups and more and more. In addition to the natural organic people that started on
Roblox
PERSON
, we're starting up studios come in on the platform as well. Professional game developers who are developing on other platforms starting to take a look at it. So, our Whopper demo A little bit older although we've had kids as young as 13. Is there something about preserving the ability for young kids to be able to make games for other kids? I mean, cuz obviously, if you have, you know, fancy studios, muscl Does that change the dynamic of the platform? I I think it does.
One
CARDINAL
of my favorite experiences is natural disasters. It's been on the platform forever by
one
CARDINAL
of our early developers. It's not the kind of thing that I I think a normal studio Think of but when developed by young creator you know we're gonna be we're gonna be hanging out together and there's gonna be a hurricane and we gotta like run away from it or there's gonna be a lightning storm like that kind of stuff we see a lot of that creative game play coming from the younger What were you into as a kid were you a gamer? I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time it was out of
I was kind of a nerd when I was a kid. I was studied really hard. I luckily grew up in
Eden Prairie
LOC
,
Minnesota
GPE
at the time it was out in the boonies from
Minneapolis
GPE
,
Minnesota
GPE
. There were sandpits and We did a lot of model rockets and we built go karts and we you know it's kind of one of these idyllic childhoods. The
one
CARDINAL
key thing that happened to me very early on is we had a computer lab in the school and then my parents bought me an apple too at the time. And that kinda got me interested I also heard you were the captain of your high school TV quiz team Think of think of
Minnesota
GPE
in the
1970
DATE
's and
80s
DATE
where every weekend two different schools compete
four
CARDINAL
students from each school you know and a really funny
four
CARDINAL
by
four
CARDINAL
configuration on a quiz bowl thing and so
Eden Prairie
PERSON
had a pretty good quiz bowl team. You eventually made it to
Silicon Valley
LOC
. Yeah. Went to
Stanford
ORG
. You started a company called
Knowledge Revolution in the 80s
EVENT
where users could create and test physics experiments. That's right. The science kid and you coming to life. Yeah, you know, went to school, had
a couple hard years
DATE
with jobs that weren't really that exciting, took
a few months
DATE
off, and I got really excited about there's this whole blossoming educational software, marketplace, the
McIntosh
ORG
had just been introduced, and it was just really interesting, exciting. I did a survey of all of that and a lot of the educational software was So when we looked at physics, it was a whole different idea. Could we make a wide open laboratory? We could build anything, any physics, experiment, bring it to life, measure it, see what it feels like. You sold that company, made some money, you became an investor, and you invested in Oh, yeah. Wow. I I had a friends to account. I'm dating myself a little bit. But I had a friends to account. I'm curious what you learn from
the early days
DATE
of social media. Yes, so one thing I learned is it was really fun to invest but it's not my sweet spot. Like my sweet spot is trying to build and create things. I remembered, I think Account number
79
CARDINAL
on friends. They're and just seeing that wonderful thing of finding other people, friend of friend, playing around with that early user interface. It's a little bit almost thinking of interactive physics where we were simulating the world and
Friends
WORK_OF_ART
, they're seeing how important social is. Those are a couple of the components that have come together in roadblocks. So, when you start a roblox in
2004
DATE
, what was the idea back then? The feeling of this Category Started feeling almost inexerable. It's a category that people have been talking about and
sci
ORG
fi for
many many years
DATE
. We've seen futurist talk about it. We've seen a lot of movies. We were thinking yes, immersive 3d co experience. Kids flocked to Roblox during a pandemic. You went public in the middle of the pandemic 2020
45 1 billion dollars
MONEY
market cap we spoke on that day even you have said that kind of growth won't keep up what kind of growth can we expect from Roblox in normal times we believe A part of all of our lives. It's gonna be the way we communicate. How people get to go to school when they can't get into school. How people. So they're gonna go to school in
Roblox
PERSON
. If I happen to be taking my science class and I can't get into the classroom and we're Thing of frog. We'll probably dissect the frog in something like
Roblox
PERSON
and a simulation which I think is gonna be very very powerful and for our company where there's a lot of people that are gonna end up working all around the world. Some of us will be For some won't having a common threeD place where we can have those water cooler conversations where everyone has a desk but we get that serendipitous thing where we both happen to go over and chat. I think also is gonna Very big. Your goal is to build an entirely new category of human Experience. How do you moderate that on such a massive scale? Do you see that coming We will not just come
In
the coming months
DATE
do you see that coming The moment news breaks
24 hours
TIME
a day.
Bloomberg
PERSON
your global business authority. When you think of cutting edge technology at sea you might be thinking of stuff like this. But there's an incoming revolution on the high seas that isn't quite as sexy but could be significant. Global trait
about 80
CARDINAL
or
90%
PERCENT
of all the world's goods are transported see at some point but there's a significant unseen cost to the modern era of global commerce. Of all the worlds is huge.
Three%
GPE
they not sound like a lot but that's roughly comparable to the entire COtwo output of
Germany
GPE
. Since reducing trade isn't a likely option. What about a technological improvement to help reduce the emissions from these well stocked maritime behemoths? Everybody is talking about the metaverse as something that's going to happen in the future but there's an argument to be made that roadblocks has already built. A better verse what do you think I think we've started It goes back to how exciting it is to to have a company in the space that I think is ultimately got so many years of growth to it and it's a new category following other types of technologies. There's still so much innovation to be done And there's so much invention to be done in this category that it's mind boggling. The critics think that metaverse, the term, it's just marketing. Respond to that. This type of technology is much more difficult than than net or the web which was another huge thing that we saw predicted and has started to come but but I think we're seeing early signs of it. When
Mark Zucker Change Facebook's
PERSON
name to
Meta
ORG
as if it was something new. Did that kinda bother you? No, of course not. It's really hard to predict in
five to 10 or 20 years
CARDINAL
. What are the companies that really figure it out? And there's so many elements of innovation that are needed. Having a
UGC
ORG
community
one
CARDINAL
of our strengths we think that's like a huge starting point for us but we're early in our quest for innovation here
Roblox
PERSON
has built a huge business selling robes does this evolve into a much bigger Marketplace. Evaluation that people would ultimately make a living on platforms like this that started this digital currency is very roadblock centric and that we're a systems company or utility so it has form this robust economy it's allowed us to keep robot you know roadblocks is free for the Would Roblox ever partner with some of these other companies working on the Metaverse whether it is
Meta
ORG
or unity or epic or
Microsoft
ORG
?
Core
ORG
technology. Going to a concert together and waving at your friends. I think that's gonna be a lot of engineering work that each company is gonna be working on and it's gonna be really hard. As far as ultimately, can an avatar go from
one
CARDINAL
place to another? I think they'll be Lightweight ways of starting to think about that. So, what role do you think
Apple
ORG
and
Android
ORG
should play in the meta verse? And and would there policies need to change to really support this vision? The biggest thing we Take advantage of if it were to happen is a change in those store fees. We we stay out of it. We like google and apple kind of run their businesses. But when we think about more and more developers making a living on platforms like us and having to build stuff. If those store fees were to change, we would Most of that money back to our developers. Your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yum. Howdy.
Your goal is to build an entirely new category of human Experience. The next phase of human interaction. Yeah. How do you moderate That on such a massive scale. Yeah. And are you doing a good enough job In
the third week
DATE
, when we were live, you can go imagine
Eric
PERSON
and myself back in our small office.
Eric
PERSON
and I said, oh my gosh, safety and civilities. It's we're gonna have to do. We had maybe
100
CARDINAL
people at the time chatting on roblox. We saw a few not that egregious but early signs that we just made the call. This is gonna be The foundation of what we do in
the early years
DATE
of Roblox as we've gotten bigger we've gotten to the point where there's
thousands
CARDINAL
of moderators every image that goes on our platform gets human reviewed we filter texts very stringently especially 13 and under players. We use a lot of AI and
ML
GPE
to help do this. We're always getting better. But it is a key thing for us. After mistake are you about AI and tech being able to do that I'm really actually optimistic we would never compare to the real world because our standards are so much more stringent but I do believe this will just keep getting better and better and I think overtime it'll get to the point where if a
6 year old
DATE
is on our platform it's As if the parents wanted to be there with them watching everything we'll be able to offer that type of thing no a lot of parents are terrified they're terrified of a future matters they don't understand the parental controls do you understand that feeling we do we actually have to I think it creates a higher For us because I think we can't assume every parent is gonna get that involved with their kids. There have been some serious content challenges, you know, the stories about Roblox being a playground for virtual fascists. What? Own child seeing an ad for a game that claim to have a sex tape of her. That was very unfortunate. There was a text blur about very shortly that very very few people saw. We took the place down. We moderated that user in the platform. It was not the video was never on our platform. There was no imagery on our platform. It was a very short mention. But very unfortunate and Well, you know, our vision is to be the most civil place for everyone. Alphabet in
Google
ORG
. This question about kids and tech habits and screen time and he said it's something that even stresses him out. You know, this is the guy who runs one of the most powerful technology companies in the world. I have
four
CARDINAL
kids. You have
four
CARDINAL
kids. Did it stress you out? Like, how did you deal with your kids? How much it's a responsibility of both platforms like us as well as parents. You know, we're all trying to figure this out. I think the one thing that we're very encouraged is that the time spent on Roblox tends to be more
Hanging
GPE
out together we're being on the phone together or doing stuff together and a lot less of it is isolated either consuming content by myself or grinding away at something by myself so we do like the fact that most of this is either We're involved in creation. What about entertainment? Would Roblox ever make a
Netflix
PERSON
show?
Bloomberg
PERSON
has enhanced search on the terminal. To deliver what you need when you need it. Now, you can simply type phrases in everyday
English
LANGUAGE
in the command line. Compare financials You can enter phrases Ask questions What do you want to know
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DATE
? Ask a question or visit search go to find answers now. Access the financial world on demand.
Access the financial world on demand Hear from leading economists Policy makers. And industry experts via live and on demand webinars. Only from
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ORG
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Bloomberg
PERSON
. Com webinars You've been investing in high fidelity graphics what is the end game here for you know more human more realistic avatars way out like a science fiction writer and talk about And I what I'm talking about now is super difficult. The end game sometimes we talk about we would go together to a rock concert or whatever concert you like. We would be there with
50 1000
CARDINAL
other people. It would feel like a movie. It would feel like real life. So are you pushing towards something like
meta horizon worlds
PERSON
? Is That's You know, more experiences like that for adults. We sometimes think of roblox ultimately as fading into the background as a utility like the electric grid. Even those photo realistic and there's all these awesome avatars and connection and identity around the The things we start seeing built on this are wide range of things. So, you imagine this not just for kids but for everyone. Adults too. Okay. Absolutely. What about entertainment? Would Roblox ever make a We would love it if one of our developers made a
Netf
GPE
So we would we would feel much more authentic if one of the creators on roadblocks who's coming up with avatars and stories and ideas and characters like that we want them to be in the limelight
Roblox
PERSON
chairs took a dive on the back of
Netflix
GPE
results Obviously plummeted. Our investors reading too much into the connection there. I think our company is somewhat unique and what is very exciting to go to work and be the CEO is being at a market like this, you know, where we think ultimate Billions of people are gonna use this type of technology and the other exciting thing about this market there's so many big inventions that still have to happen it feels like we're pretty mature but inside our company we realize like there's
six
CARDINAL
or
seven
CARDINAL
big inventions we need to make to get to that next step would roadblock Consider more in game advertising. Yeah, there's a funny trivia note I would share to all the
Roblox
PERSON
fans out there. There was a time. The very
first
ORDINAL
way we monetize was advertising and then there was also a time when we had pre-roll video on
Roblox
PERSON
. That's all gone now. It's gone Couple of reasons. We didn't want it to interfere with the user experience. And also our our virtual economy has become such a powerful way to power this that we are able to take that down in the future though. I think there's a certain type of That is kids safe that is immersive that doesn't get in your way. Yeah, I think our the people on
Roblox
PERSON
, you know, they're there to authentically connect with their friends As long as what we're doing with these brands is very clear non deceptive, appropriate for
those ages
DATE
. I think they'll they'll figure out the balance of how much time do we go into a store versus how much time do we go to a crazy adventure tycoon and you know, build an amusement
Together
ORG
. So, either way, this could be a huge new revenue stream I believe it's an awesomely huge revenue stream and at the same time, we've been very gentle towards it. So, as you look ahead, what do you think are the biggest challenges? Roblox will face. Vision plays out which we hope it does and we have people of all ages on the platform and we're around the world I think maintaining that civility as we grow as we have older people who might wanna do go to a political rally thinking ways to do that in a systemic way that's a big challenge it takes a lot of thought I think thinking through the I I really like we're very technology driven company so it's fun to be running a company where we have to do these
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology
And to be running a company where we have to do the
seven
CARDINAL
big inventions and you know what we're doing right now isn't gonna cut it so knowing that technology challenges super interesting. We do a little rapid fire section just to get this. Okay. Try to be awesome.
First
ORDINAL
question what's your morning routine Wake up. Outside on my porch do a crossfit workout Take a shower go to work. Where are you most productive? Home or office? Both. Different types of productivity, homes, and state, flow state at time, office, connecting, being together, brainstorming. What's your favorite show What are you binging? Oh my gosh. If if you look at my
YouTube
ORG
history, it'd be it's it's this weird mechanical stuff. Off-road vehicles and rockets and ships and big waves. Best life hack. I think it all gets down to the joy of health really like if if I'm not, you know, feeling centered but sleep, exercise, diet, all of that, everything else just completely falls. Radio show. Yeah. Now that I've met you in person, I I get this. No way. You've been pretty fun to listen to yeah what was your style like what was your Starting in college when I would have insomnia at
2 AM
TIME
I would turn on talk radio and you know all those famous
KGO
ORG
people
Bill Wattenberg
PERSON
Just listen to the people calling in. So, I after acknowledge revolution was acquired. I had
a year
DATE
. I had a little time to dabble. My jam was really trying to talk about outrageous topics, you know, Gambling, other controversial things. It was in a small market in
Santa Cruz
GPE
. I would typically is really hard to get people to call in. Yeah. You know, it's like call your mom. It's really scary if you're a DJ and no one's calling you inside. I I made it really controversial. I have people come on and debate interesting topics. If you could have dinner with
Steve Jobs
PERSON
or Walt Disney. Towards you back. You can't pick both. I guess I would have to slightly lean
Disney
ORG
. Just because he was not just the usher of the innovation but actually was kinda part of the The innovation. But I think
Steve
PERSON
leaned much more on finding the people to drive that innovation. Best advice for your 20s. Don't freak out if between
the age of 22
DATE
and
25
CARDINAL
everything is a disaster. Best advice for
your 40s
DATE
. Life is short. It's such a valuable commodity. What you do, your friends, your time, your family is so important. So, how do you define work life integration? I don't like the work balance. I would say can I Make my roadblocks job better than anything else I would Like can it be better than retiring? Can it be better than a hobby? Can I figure out what my unique job is a CEO? Every CEO job is different. Like I like doing it. So, can I figure out what my role is? You mentioned your co
Eric Castle
PERSON
. Yeah. Earlier who died Of cancer. Yeah. In
2013
DATE
. If he was here
today
DATE
, what do you think he would think of the roadblocks that Roblox has become? I think he'd be proud It's a good question. Yeah. Like, I think he would you know, his both of his sons have worked at the company a bit. So yeah, I think he'd be very excited. Seems like you you miss him. Just such a brilliant partner. Yeah Any he also set the standard for taking the long view on how we engineer things a lot of the Roadblocks is still You know, his vision lives on. And it goes back to your advice for your
40s
DATE
. Life is short. It is. So, in
5 years
DATE
, will the metaverse exist? In in the form that you imagine or is it take does is it Much longer like what's the time horizon? Well, it's really interesting, right? Cuz we're right in the middle of it right now. In a sense with
50 1 million
CARDINAL
people every day on our platform. Yeah. It's already here. And at the same time, Ultimately gonna be possible could be
510
CARDINAL
or
20 years
DATE
, out. So, it's it's all the anniversary really has existence since Online dial up muds really twoD very simple text
Enter
20 years
DATE
out so it's it's all the verse really has existence since Online dial up muds really twoD. Very simple. Text. You can call that the
Mediverse
PERSON
. It's existed in multiplayer gaming, world of work, Exist now with more people and in
10 or 20 years
DATE
it'll exist photo realistically with
50 1000
CARDINAL
people Have so much passion for this job Roblox your final stop on your journey. Well, definitely my finals but I think there's a lot of time ahead of me here.
Dave Bazuki
PERSON
over a blocks. Thank you so much. People ask me all the time, what is the key to being a really good investor? I tell them, it's a surround yourself with and work with the best investors you can find. On
Bloomberg Wealth
PERSON
, I'm gonna take you to meet the greatest investors in the world. The people that I would like to have managing my money. That the start of the internet revolu I have kicked up a lot of controversy declaring that the internet had been under hyped. I say the same thing
today
DATE
about the climate revolution.
Ken Griffin
PERSON
is moving both Citadel and Citadel Securities to
Miami
GPE
that was broken by
Bloomberg
PERSON
's
Amanda Bloomberg
PERSON
. It's a great question. Great question. I'm glad you said Hey Crucially important and I think we've moved from this attitude from it's an indulgence a waste of time almost an illness that needs a cure For something as universally important to human life Sleep mystery surrounding its necessity and utility have only just been recently uncovered. Some of our biggest discoveries were in the
1970
DATE
's or
1980
DATE
's and so it makes it a really exciting field because it seems as though we're uncovering new insights each and every day. Some scientists are going further to find out how sleep and what happens there can be harness to further expand our understanding It's easy to memorize that makes you smart if you can spit it back a lot of back but if you wanna be wise if you really want wisdom you gotta know when and how and why to use that information And that's what your brain figures out while you're sleeping. A very good morning welcome to
Day
DATE
Break
Australia
GPE
I'm
Hardie Stragg
PERSON
what's in
Sydney
GPE
? Good
evening
TIME
One
CARDINAL
central bankers gather
this week
DATE
for their
annual
DATE
retreat in
Jacksonville
GPE
.
Central Bank
ORG
For their
annual
DATE
retreat in
Jackson Hole
GPE
Chinese
NORP
bands expected to slash key landing rates for the
first
ORDINAL
time in
months
DATE
as the economy battle severe headwinds.
China
GPE
's energy crisis is adding to those economic pressures. So, Trump province now said to what send limits on power supply to some industrial Source by
5 days
DATE
.
500
CARDINAL
Since June and we're seeing the pressure continue in the
Asian
NORP
session of course we had
two 1 trillion dollars
MONEY
of options expirations I really didn't With the volatility with the big Level we have seen treasure years also
This week
DATE
at
Jackson
GPE
holding order to gauge what the favorite trades of
the year
DATE
will be so far this year a flattening yield curve has been the wager of the day take a look at crude prices under There has been that conflicting dynamic about perhaps Some of those
Uranian
NORP
oil supplies that climb could be pretty fast. This is what you Back in
2015
DATE
after the nuclear deal
today
DATE
President
Biden
PERSON
spoke with Western leaders about where those nuclear negotiations where and if history is any But we could see a fast revival of that output if a deal does come in place Yeah sure it'd be interesting to see what that means for energy prices because any sort of cooling that we do get there could give
Asian
NORP
stocks as well a bit of breathing space in terms of the direction though for market
New Zealand
GPE
already online to the downside here. You mentioned the dollar direction we're looking a little bit mixed in the G 10 space You can see here the moves in the Aussie and the yen as well with trade is very much focused on what happens
this week
DATE
at
Jackson Hall
FAC
now the other major factor
Four
CARDINAL
sentiment in
Asia
LOC
is what we see from
China
GPE
because if we change on now we have
more than 300
CARDINAL
companies reporting earnings here
this week
DATE
on the mainland now the focus for that of course In terms of how bad the numbers are versus what was indicated in
the second quarter
DATE
economic data but in terms of what analysts have been doing will they be downgrading there forecast for earnings for every single sector here except energy and industri There are the energy shortages that
Need
ORG
to grapple with as well. Does
one
CARDINAL
of those issues playing investors mine's at the moment and
Bill
PERSON
you mentioned
China
GPE
earnings we're in the thick of
Ernie
ORG
's still here in
Australia
GPE
trickling through
this morning
TIME
is
Lenley
PERSON
's we do have a
4 year
DATE
net loss being declared of
90
CARDINAL
One 1 million Aussie dollars estimates were for a profit of
149
CARDINAL
.
2 million
CARDINAL
so a huge miss there the final distribution per security of Operating profit coming in at
276 1 million dollars
MONEY
they also announced what is going to be a updates when it comes to that Ability linked to lines that we have seen really the climate change issues spurring green bonds in
Australia
GPE
to what is setting up to be
a record year
DATE
but landly is they're probably developer could really be facing these additional challenges to deliver on some of these commitments as we see the broader
econom Slow
PERSON
down as well as really you know what what we can continue to see as the slow down in the property sector here as well. And lots more coming up when it comes to daybreak
Australia
GPE
. We'll be talking all of through those headlines headwinds as well as of course the outlook for the global economy. Show the Up for
a big week
DATE
ahead with
Central Bankers
NORP
gathering at
Jackson Hall
FAC
. Take a look at what is really coming up for you. We're speaking to a lot of great guests including
Tony Lombardo
PERSON
from
A big week
DATE
ahead with
Central Bankers
NORP
gathering at
Jackson Hall
FAC
. Take a look at what is really coming up for you with speaking to a lot of great guests including
Tony Lombardo
PERSON
from
Landley
ORG
's joining us on those latest results at
12:30 PM
TIME
: in
Sydney
GPE
. Yeah. Write the idea as you mentioned of course a key focus is on what's happening at
Jackson Hall
FAC
this week
DATE
right and really it could be resetting market expectations because Are really taking a look at what the favorite phrase of the year happened in treasury markets and that could really take a turn depending on what your power says let's bring in
Bloom Correspondent
LOC
Asia Edro
PERSON
,
Andrea Papo
PERSON
,
Kathleen
ORG
, let me start with you because really expectations are high for what we could expect from
Chair Powell
PERSON
this week
DATE
but we've had a Officials emphasizing the need for higher rates. Great way to start off this conversation because
Jackson Hall
FAC
is it's there's no other Is this central banker that sort of sets the the course not only for the
US
GPE
but frequently for others other A social banks, other markets as well, and I wanted to start by reminding everybody back in
2010
DATE
,
Ben Bernanki
PERSON
,
Fed Shear
ORG
, signaled the
second
ORDINAL
round of quantitative Is Paul gonna do something like that? To be what the single is gonna send is very very key because now remember this is the He's gonna be speaking since that CPI headline number pulled back from
nine
CARDINAL
. One% in
June to eight and a half percent
DATE
year over year and then you got a job Report the payrolls that were up
528 1000
CARDINAL
twice what was forecast in
the month of July
DATE
so that's a push pull there so the question is is he ready to risk To get inflation down and markets right now are seeing
fed
ORG
tightening slowing perhaps partly because of that consumer price index starting to look a little bit Will he jump on that bag and bandwagon I should say. But you look about the what's being expected here you can see overtime that expectation for where the funds rates going
this year
DATE
next has gotten higher it's up to
Next year
DATE
. So, it still has a
about 100
CARDINAL
Basis
LOC
points more to go
Tom Barkin
PERSON
his president of the
Richmond
GPE
fed on
Friday
DATE
made it pretty clear he's on he's on the side saying we'll do whatever it takes he said we're committed to returning inflation to our
two%
ORG
target and will do what it takes to get there there's a path to getting inflation under control or recession could happen in the process he's not It's not that kind of speech it's gonna be big picture and have a
Kinda
GPE
longer term note than that. However, I would say
one
CARDINAL
thing hi if power focuses on how they can get a soft landing and not so much on we're gonna keep pushing hard even if it means recession markets Take that as a little bit. Kathleen of course we're also watching in terms of the broader environment in
China
GPE
and
Steve
PERSON
we're watching for that loom prime rate is that likely to really track the pivot we saw from the PBO Given that we're seeing all of these indications of an energy crisis as well. Yeah, that's right. That'd be obviously the
Chinese
NORP
economy is suffering right now as slow down numbers across the board in
July
DATE
and as
Kathleen
ORG
, we're just talking about you know, the
Fed
ORG
Is going to be tightening. Well, the PBOC going in the opposite direction. They had, of course, the cut to
the 1 year
DATE
MLF
ORG
. They also cut their
7 day
DATE
reverse repo, loan rates. I am, this is likely all to set the stage for the fixing later
today
DATE
, for the loan prime rate, the one On prime rate expected by all the economy surveyed by
Bloomberg
PERSON
16
CARDINAL
of
16
CARDINAL
to have at least a
10
CARDINAL
basis point cut to
three
CARDINAL
.
Six%
GPE
today
DATE
on
the 1 year
DATE
LPR
the 5 year
DATE
LPR a little bit of a more of a mixed reaction
Bloomberg
PERSON
expect an even bigger cut to
the 5 year
DATE
loan prime rate which is more closely associated with mortgages keep in mind bank lending to the real estate sector we all know about their problems
Even bigger cut to
the 5 year
DATE
loan prime rate which is more closely associated with mortgages keep in mind bank lending to the real estate sector we all know about their problems has dropped or
Drop
PERSON
in
July
DATE
for the
first
ORDINAL
time in
a decade
DATE
and corporates and households have shown a reluctance to borrow right now given
a week and a half ago
DATE
or so that bank lending and aggregate financing numbers which really dropped off the cliff in
July
DATE
. Yes, it's a According to
Bloomberg
PERSON
can you mention about those
Shortages
ORG
in situan and overall down in the south where temperatures have been above
40
CARDINAL
ยฐ for
a number of days
DATE
we've had no rain in
Chungdu
GPE
for
15 days
DATE
no rain in
Tong Ching
GPE
for
18 days
DATE
non jing and nonchang haven't had any rain since
early July
DATE
so if that's exacerba Obviously the water levels at the hydroelectric dams power shortages are gonna be extended to the corporate sector of beyond what was supposed to end on Saturday to this
Thursday
DATE
factories like
Toyota
ORG
and
CATL
ORG
the big battery maker for EVs they are extending Plant closures as well. So, yes, more strain on the
Chinese
NORP
economy. Thing that's happening in
China
GPE
not to mention of course the upcoming
Jackson
PERSON
whole meeting
Andrea
PERSON
what are we expecting when it comes to trading and investor mode in
Asia
LOC
? Hi,
Sherry
GPE
. Yeah, look, that's right. I think what one of the major things that markets are going to be looking at is the shape of that yield curve. You know, that is becoming a
March
DATE
more difficult trade given how far you know, that Has has inverted and you know a lot of depend on those nuances from
Jackson Hall
FAC
in front from what And look it doesn't it's not as much now about how many more rate heights there will be but also the economic consequences of you know of these raid heights you know and and you know we have seen that Actually you know steepen
Last week
DATE
and he just shows how complex this is for for investors. So, yeah, we're bonds are going. The shape of that yield curve is going to be a major focus for investors
this weekend
DATE
. We sort of we're seeing that we're Get under pressure when when trading starts in
Asia
LOC
today
DATE
. Yeah,
Andrea Papo
PERSON
,
Bloomberg
GPE
, school economics and policy at their cathing. Chief
North Asia
LOC
correspondent As well with our top stories
today
DATE
. We'll have live we'll be live at
Jackson Hall
FAC
later this week
DATE
for that crucial powel speech as well as interviews with vet presidents from
Kansas City Philadelphia Saint Louis Cleveland
ORG
and
Atlanta
GPE
as well let's get over to
Bonnie Quinn
PERSON
The
fourth
ORDINAL
world headlines. Thank you. Prime Minister
Anthony Albanese
PERSON
has taming inflation is a key priority for his government. Headline inflation was running at the fastest pace in
21 years
DATE
in
the second quarter
DATE
and it's forecast to accelerate even more by
year end
DATE
. Speaking with
Sky News
ORG
,
Albanese
NORP
, echoed advice from
the treasury department
ORG
and reserved bank that inflation will not hit
10%
PERCENT
.
Singapore
GPE
is repealing a colonial era law that criminalizes sex between men. Prime Minister
Alicia Lung
PERSON
says removing the legal ban on sex between men is the right thing to do and something that most
Singaporeans
NORP
will now accept. Recognizing same sex unions adding that the constitution will be amended to protect the definition of marriage as being between a man and a woman
Japan
GPE
's government says Prime Minister
Funya Akita
PERSON
has tested positive for COVID and has relatively mild symptoms.
The 65 year old
DATE
developed a cough and slight fever on
Saturday
DATE
Prime minister's official residents and is expected to resume duties remotely on
Monday
DATE
.
China
GPE
's latest COVID outbreak is worsening with new cases jumping my
more than 2000
CARDINAL
over
the weekend
DATE
in
Southern Island
LOC
of Highlands are the most new infections with
more than 1000
CARDINAL
report Followed by
Tibet
GPE
and
Tin Tang
PERSON
. In
Hong Kong
GPE
daily
DATE
cases rose to the highest in
more than 4 months
DATE
on
Sunday
DATE
at
six and a half 1000
DATE
the city is reopening one of its biggest isolation and facilities as the surge puts pressure on hospital
Daily cases rose to the highest and
more than 4 months
DATE
on
Sunday
DATE
at
six and a half 1000
DATE
. The city is reopening one of its biggest isolation facilities as the surge puts pressure on hospitals. Global news
24 hours
TIME
a day on air and all
Bloomberg
PERSON
quick take powered by
more than 2700
CARDINAL
journalists and
more than 120
CARDINAL
countries I'm
Von Equin
PERSON
this is
Bloomberg Sherry
PERSON
. And fill ahead while the previous listed or generally set to hand down legal advice on former Prime Minister
Scott Morrison's
PERSON
secret ministries one of us really Most respected political commentators gives us her take
later at
TIME
this hour
TIME
. As we look ahead to the trading week this is
Barring
GPE
. Is it possible the industries in an arms race that will Lead to spending itself into an over supply. I mean, that has happened before We we we've looked at this very carefully and yo, the digitalization of everything. Tell me what aspect of your life, Emily? Is it becoming more digital? Well, I'm trying to prevent that but yeah. Hey COVID has accelerated that. The industry cost
500 1 billion dollars
MONEY
last year
DATE
. Industry overall. Estimate are
one 1 trillion dollars
MONEY
. A doubling by
the end of the decade
DATE
. At that point, I believe those estimates. It's not that there's not gonna be some blitz and turns on the way and the majority of that is driven by Process technology but which
only three
CARDINAL
companies can satisfy that needle. It's curated
Three and a half percent
DATE
. We get
July
DATE
CPI data. On
Thursday
DATE
, traders expect
the Bank of Korea
ORG
to raise its key rate by
25
CARDINAL
basis points. And the
Jackson Hall
FAC
economic symposium begins always closely watched for clues on the path ahead for the thread and the other central bank. Also more major
Chinese
NORP
companies set to release earnings data
this week
DATE
MSEI China
ORG
earnings per share estimate suggest aggregate profit Revenue that I'll be consensus calls for a contraction COVID related
I'll be consensus calls for a contraction separately
Quanta
ORG
is set to report on
Thursday
DATE
giving investors a look at how a tight labor market in COVID related Are affecting the
Aussie
GPE
flat carrier. Officials Bring in the XM
Australia
GPE
CEO
Peter Maguire Peter
PERSON
good to have you with us of course this chart on the
Bloombrook
PERSON
just right off the bat we're seeing financial conditions starting to ease again this is not what the fence has wanted to see will they need to address this and what does it mean for us it's Well I'll take a good good morning I think it'd it creates a headaches naturally we're gonna be interested what a discuss
this week
DATE
and what the rhetoric coming out
Jay Powell
PERSON
and his gang We've had a very strong move to the upside and naturally over those last 8 weeks as far as
US
GPE
equities and is that going to maintain over the
September October
DATE
period or we gotta see a pool back and there's many analysts saying that we're gonna see a pool back. It's been the unwinding as far as short bats and hedge funds and options All those sort of things. So, this is the dilemma that the
Fed
ORG
's facing and how they move forward. And of course we have seen the dollar already rising to that
Weeks
DATE
since
April 2020
DATE
or so it's been a good week I just to say that
the Green Bag
LOC
has continued to rally if we do see a What does that mean for the
US
GPE
currency? Well, I think
first
ORDINAL
off, it's the best of a bad bunch. So, there we face it. It's currently sitting at the over 108 that
US
GPE
dollar index you've seen the
Yen
PERSON
being hammered. I've got smash
last week
DATE
. The Euro at Parity, the pound, going under massive, yeah, I pushed the So the overall on the commodity currencies are being you know smashed as well kiwi and the Aussie so the
US
GPE
dollar seems to be king dollars raining supreme trade as a loving it and I think that there's probably further upside By
the end of the month
DATE
.
Peter
PERSON
, when you take a look at the
Australian
NORP
earning season, how does it compare to what has been kind of a collective side of relief in the
US
GPE
? What is the next I guess 6 months really whole in terms of the the guidance Had so far. I think the major concern is what we're looking as far as the domestic situation in
Australia
GPE
Wage growth what we're doing withinflation the general consensus on main street the herd out there we all understand the conditions that we're all facing and you know high energy costs and so on so the how that rolls across to the balance Equity markets and the in the large companies is going to be interesting. It could be a you know it might be a very tough timer. I think for domestic equities After
Christmas
DATE
so we're just sitting on our hands looking and seeing opportunities but it's I think it's volatility is going to start a ramp up over the matter of the next matter of
weeks
DATE
Which will be interesting when it comes to this not just rotation into growth with what you're seeing with the
Nazdac
ORG
100 but the rotation back into these memes stocks right what do you make of that peter bag Addition to the bounce that we we're starting to see across crypto as well. Well exactly I'll tell you what the main stocks have been outstanding over
the last couple of weeks
DATE
to look at and just observe trade as a loving and I'm I'm really get off on the on the chatter that you're here and you know all the comments it's yeah I can see why so many traders enjoy those those interactions at And the opportunities are immense so yeah I've I can't go out there and say hand on heart what's going to be the next one to follow but they're never sure to surprises and you've only got a look at Over
the last couple of days
DATE
to really take an appreciation of what's going on with some of these stocks.
Peter McGuire
PERSON
, good to have you with us.
XM
GPE
,
Australia
GPE
, CEO, setting up, up for the rest of
the week
DATE
when it comes to the market. You can actually get a Of all of those stories that you need to know to get your day going and
today
DATE
's edition of
Daybreak
WORK_OF_ART
. Terminal subscribers go to
Davey Go
ORG
. You can customize your settings. So, you only get the news on the industry and the other
And you need to know to get your day going and
today
DATE
is
the day
DATE
of daybreak. Terminal subscribers go to
Davey Go
ORG
. You can customize your settings so you only get the news on the industry and the assets that you care about. Hey sis balloon bark. While
Tesla
ORG
's in the like make for good headlines the reality is that even if every car on the roads
today
DATE
when electric it wouldn't be enough to curb global emissions to avoid catastrophic climate change. Greenhouse gas emissions from transportation account for
about 29%
PERCENT
of total
US
GPE
greenhouse gas emissions. So what about the other
71%
PERCENT
? Give us the energy electricity we need we wanna do
100%
PERCENT
clean energy Vehicle is all electric with no fossil fuels. We wanna do that with our buildings and if we can do it in
one
CARDINAL
building, we can do it in all buildings And if we do it in all buildings we'll reduce
30%
PERCENT
of
US
GPE
greenhouse gas emissions. Covering all things crypto. As the world watches inflation rise employment rebound and fiscal policies react all roads lead to
Jackson
GPE
home for
the kansas city fence
ORG
2022
CARDINAL
economic policy symposium
Bloomberg
PERSON
Here's a quick check of the latest business flash headlines
Warren Buffett's
PERSON
brochure
Hathaway
PERSON
one approval from
US
GPE
regulator
Subaia
GPE
as much as 50%
PERCENT
of accidental petroleum brochures spent
the year
DATE
wagering more on accidental after
four
CARDINAL
making a bet on
the Houston Bay Stoil
LOC
company
three
CARDINAL
Retailers are feeling the pain, bed bath, and beyond chairs, tumbled
as much as 43%
PERCENT
after
Cohen
PERSON
's exit. Paul now said management will be in focus when
China
GPE
opens for free that's after
Mooney
PERSON
's investor service put it on review for possible downgrade it says the bad Territory. Taking a look at
the day
DATE
ahead for
Australia
GPE
,
New Zealand
GPE
. It's
another big day
DATE
for earnings for a number of companies. We just had Lent knees. Reporting a full year in that loss of
99 1 million Australian dollars
MONEY
or
67 1 million
MONEY
US
GPE
.
Millions
CARDINAL
of frequent flyers made
Over flight cancellations, delays, and offering $
50
MONEY
off, return flights for
millions
CARDINAL
of frequent flyers based in
Australia
GPE
,
New Zealand
GPE
. And fresh red
Jim Thomas
PERSON
says work is underway to improve regulations on crypto acids including a consultation with stakeholders and the start of a token mapping Yeah we'll be watching those assets as we get trading underway here in
Asia
LOC
but take a look at the
US
GPE
futures picture we're seeing S and P 500 as well as
Nazake
ORG
future's extending those losses at
the start of the week
DATE
heading into of course a big
Jackson
GPE
whole wig buy those declines that we saw really we get at
the end of last week
DATE
treasury
ORG
features just modestly hard WTI Are also seeing a little bit lower there as well of course we've talked
about euro dollar
MONEY
heading towards party
4200
CARDINAL
is the level to watch when it comes to essence S and B futures in terms of potentially that acceleration into a deeper cell of take a look at the picture for risk as we get into
Monday
DATE
session here in
Asia
LOC
though that softer finish for the
US
GPE
session as well as
Bons
ORG
on
Friday
DATE
. It sets up for a pretty volatile start. We are seeing
Sydney
GPE
futures sitting a little bit lower. The
Aussie
GPE
dollar that really risk of sentiment playing through at
6873
DATE
, and some weakness for Nikay futures as well,
Sherry
PERSON
. Hi they will have more on
Australian
NORP
season throughout
the day
DATE
including an interview with The
Indian
NORP
city of Jamnigar is a money making machine for
Asia
LOC
's richest man
Mukesh Ambani
PERSON
His company reliance has the world's biggest oil refinery complex here in the city.
Jamnagar
ORG
is also wearing is making his newest bet. A
10 1 billion dollars
MONEY
investment in green energy. His ambition is closely aligned with the
Indian
NORP
government's plan to reach net oh emissions by
2070
DATE
But
Barney
PERSON
is not alone.
India
GPE
's
second
ORDINAL
richest man
Galta Madani
PERSON
has committed
20 1 billion dollars
MONEY
of investment over
the next decade
DATE
. But
India
GPE
's massive dependencies on fossil fuels have some environmental applicants questioning the realism and sincerity of those green ambitions and those of its
two
CARDINAL
biggest billionaires. Hey Facebook Welcome to Dead Rock Australia We're counting down Are you guys excited? This is a question because we have seen those conditions easing lately and I shouldn't be the Yeah, that's right. So basically
Bank of America's
ORG
got a node out
this morning
TIME
and essentially what they're saying is that they're expecting the
fed
ORG
and
JPO
ORG
specifically
this week
DATE
at To reinforce this commitment to price stability even at the risk care of sparking a rec Went into
this Jackson Hall Symposium
FAC
with
Well
a year later
DATE
of course it's a very different scenario indeed so we are risking inflation Also expecting to keep with this message a restrictive policy even Against this idea of pivoting quickly to rate can't so if you change on now taking a look away bank of
America
GPE
sees us going from here so if you take a look at the midpoint of the Funds rate target range. If you just bring up the terminal chart, you can see here, we're at
two
CARDINAL
. Four%. We'll bank of
America
GPE
sees that getting to
three
CARDINAL
.
Five to 375%
PERCENT
. By
the end of the year
DATE
and no change here in inflation or in We see a change inflation at
eight
CARDINAL
. Five% and they need to get it of course
Heidi
PERSON
down to around
two%
ORG
. Stand the chart for
one
CARDINAL
bell thinks that you know let's not get ahead of ourselves because that full impact of the
Fed
ORG
Tartney Moose may not yet be felt. Yes this is interesting as well because of course we've had that big move high in global stocks since those
June
DATE
lows up
nearly 10
CARDINAL
And also that rally in risky assets but standard charter says that's really just been off the back of this expectation that the What is going to be at the final stages of its tightening cycle and that could certainly not be the case. So essentially it says that the full impact of tight Is still do we feel that we change on now what that means in terms of their their strategists while they're saying that the risk award of playing for a recovery in growth and risky assets is looking a little bit less appealing Also saying it's gonna be getting a little bit noisy ahead. Just a lot of uncertainty ahead of what is
a very big week
DATE
for
Central Bank
ORG
really passing those comments that will be getting a little bit later on out of
Jackson Hall
ORG
let's get you to
Vonny Quinn
PERSON
now who's in
New York
GPE
with the
first
ORDINAL
word Lines funny.
Katie
PERSON
, thank you.
Richmond
GPE
fed
ORG
President
Thomas Barkins
PERSON
has the central bank is committed to taming
US
GPE
inflation even if that means risking a recession.
Mark
PERSON
and says policy makers will do what it takes to return inflation to the
two%
ORG
target while acknowledging that a recession could happen in the process. Speakers have agreed more rate heights are needed while debating the size of the next move.
India
GPE
's food department says it is no plans to import wheat with current stock sufficient to meet requirements reserves decline to their lowest
monthly
DATE
level in
August
DATE
while prices have surge
nearly 12%
PERCENT
.
Bloomberg
PERSON
sources say government To help flower millers and some regions get supplies
Germany
GPE
may not be able to replace all its imports of
Russian
NORP
national gas this winter and might have to resort to nuclear power. Chancellor Decades has forced politicians to look at alternatives including atomic energy with
Journey Germany
ORG
had decided to exit permanently by
year end
DATE
. Global news
24 hours
TIME
a day on air and
Dom Bloomberg
PERSON
we take powered by
more than 2700
CARDINAL
journalist analysts and
more than 120
CARDINAL
countries I'm
Bonnie Quinn
PERSON
this is
Bloomberg Sherry Hey Bonnie Singapore
PERSON
will scrap rules for wearing masks in most indoor settings as it moves further away from pandemic era curves managing editor global business
Emma O'Brien
PERSON
joins us with more in this
Emma
PERSON
so
Singapore
GPE
Really lifting those restrictions that we've seen throughout the pandemic. What do we know? Yeah I mean
Singapore
GPE
is really moving ahead most distinctly against
Hong Kong
GPE
in terms of those financial centers here in
Asia Dismantling
LOC
one
CARDINAL
of its last most significant virus curves. The wearing of masks, indoors, that means so you no longer have to wear a mask in offices, in public places like restaurants, movie theaters, that sort of thing. So really big step toward normality is cases come down
3000
CARDINAL
a day in
Singapore
GPE
which has really sort of led the way somewhat in that normalization step. A pretty big jump in numbers for
China
GPE
. Big big
four
CARDINAL
China
GPE
of course is a lot of this coming through from
Saint
GPE
Normalization step. Had a pretty big jump in numbers for
China
GPE
. Big big
four
CARDINAL
China
GPE
of course is a lot of this coming through from
Sonia
GPE
. Yes, that's right. Hi,
Nan Island
GPE
. Continues to be a problem. This is the southern province Some of the infected down there that seeing consistently around a
1000
CARDINAL
new cases Are they trying to move some of the tourists out of out of the island trying to get them home they are subject to a raft restriction Typical with
China
GPE
's COVID oh situation. Lots of tests and mandatory isolation for
a couple of days
DATE
once they do get back to their home places within
China
GPE
. And In
Japan
GPE
we've really seen cases hover it pretty close to record highs for for a while now right now the prime minister is actually tested Yeah
Japan
GPE
sort of someone in the middle between sort of
Singapore
GPE
and then obviously
China
GPE
on the extreme and they are keeping some restrictions in place particularly around travel tourists cannot freely travel in and out of
Japan
GPE
unlike
Singapore Wave
ORG
cycle The top of that now of course exemplified by the infection of the prime minister who apparently has a pretty mild case and will return to some work duties Of course
today
DATE
. And am I you mentioned how
Singapore
GPE
was going in the opposite direction to
Hong Kong
GPE
? What's happening in the city? Yeah I mean you are seeing a wave really start to pick up there and it's affecting the hospital system it is
Isolation
ORG
centers which they used to house people that can't Biggest isolation sites has been reopened. They've added
200
CARDINAL
beds there. So a real sign of of how
Hong Kong
GPE
continues to sort of Federal ministries broke the law
Michelle Bratton
PERSON
next. Embark.
One
CARDINAL
of the most important things is looking around the corner. We have to let go of the traditional legacy department store. We tend to believe that all consumers are equal they are now look for cheap future officer on
Bloomberg
PERSON
Alright we do have just some more earnings crossing
the Bloomberg Star Entertainment
ORG
here really reporting these results given what is a difficult situation for the gaming environment here in
Australia
GPE
with a number of inquiries of course happening across different states sorry entertainment reporting car
4 year
DATE
cup packed
about 150 1 million dollars
QUANTITY
. Revenue trends from
the fourth quarter
DATE
continue into
the early first half of full year 2023
DATE
. We're also looking at full year international VIP rebate that win rate at
265%
PERCENT
. There. Start. It's entertainment. The final dividend per share. Not issuing one in And that
full year
DATE
normalized
Normalized
ORG
numbers coming through there as well given that we have seen just a difficult operating environment that
full year
DATE
net loss coming in $
198
MONEY
.
6 million
CARDINAL
and it has been just a really Challenging. When it comes to how the stock cost
Down
PERSON
just about 15%
PERCENT
versus brought it downside for the AS
51
CARDINAL
of
five
CARDINAL
. Two%. Take a look at how we're tracking when it comes to the start of the trading day here in
Asia
LOC
. We are seeing the
Aussie
GPE
dollar really bearing the brunch of that risk Sentiment going into
Jackson
PERSON
a whole wheelchair attempt to kind of hit reset what it comes to monetary policy and inflation expectations we've seen the
Aussie
GPE
just turning positive but very much under 70
US
GPE
sent level where we have seen. A bit Peak. It's a day features off by
just about four
CARDINAL
tenths of
one%
ORG
there. We do have the a little bit of a move when it comes to kiwi. It kiwi stocks
Down
PERSON
just about two
CARDINAL
tenths of
one%
ORG
. That
second quarter earning season
DATE
has been
Restoring
PERSON
a little bit of faith when it comes to guidance but certainly perhaps has not been as robust as what we've seen in the
US
GPE
earning session. And of course politics remaining at the
four
CARDINAL
when it comes to what's going on here in
Australia
GPE
today
DATE
. We are getting the the solicitor general advice when it comes to Former prime minister's got
Morrison
PERSON
. He'll be finding whether he's secret swearing in for himself to
five
CARDINAL
ministerial posts broke any laws will be getting that as soon as it crosses But in the meantime let's get some analysis now from
the University of Canberra's
ORG
Michelle Graton
PERSON
who joins us with her analysis
Michelle
PERSON
great to have you and we look we're not expecting that that advice is going to suggest that any laws
Broken
PERSON
. Really raise a question of whether there should have been laws in place to prevent this and is is a damage already done when To the liberal party. Hi we're on the question of whether there should be laws in place or should have been I think that you can't cover everything by law that conventions are important and really what we're talking about here Convention and proper behavior. No one would expected a prime minister to take this action. It wasn't necessary to insert himself
Julie
PERSON
's portfolios even in Situations I think that the idea that leader wouldn't tell his colleagues was just bizarre. In terms of whether damage has been done yes to an extent damage has been done because there's a lot of talk about undermining the democratic system But nevertheless the fact that this has been exposed I think shows To there's AA certain In the system for the future that leaders would be much more careful much more aware of conventions in the future having said that I think that the
Labour
ORG
government To formalize convention at least up to an extent. The prime minister's reaction to this has been quite interesting because this is
Formalized convention at least up to an extent. The prime minister's reaction to this has been quite interesting because this is really just a A news piece that has fallen into their lap at a time when there's a lot of domestic pressures Actually was quite defensive when he he was accused of you know talking about this as opposed to cost of living pressures as opposed to rising interest rates but he said this is what he keeps getting asked about how do you see
the the Labor Party's
ORG
handling of this low governments handling of this and you know is there any fairness to the criticism that there he's still beha Opposition leader. Well as you'd say there's no doubt that the labor party using this basically And they would have memories of the coalition When he came in to government pursuing the former
Labor
ORG
government so there's a bit of payback in there in the background I think that the Labor That it's got to be All in using this situation that it's got to be seen to be going through the proper processes In the way handling it but it is right that I think that the issues that the public Really concerned about not the past obviously Hey The previous prime minister but we are facing real Now of cost of living and real wages going backwards and I think that the government in
the next couple of weeks
DATE
will want an emphasis on
Job
PERSON
so much which comes at
the end of next week
DATE
and that will be looking at issues such as getting more people into our labor market more integration things like that. That's what the real world is
primari
ORG
Concerned about here. There's the latest scandal rocking the opposition members because they're the ones who have to really dance a delicate dance so they pissing themselves from the former prime minister do they defend him is that going to actually increase the political Capital for the government. Yes it will don't forget that we're
3 years
DATE
away from an election so in terms of this coming to a crunch in in votes it's a long way off and we'll be long forgotten By then but in the term the opposition is as you say in the very difficult position because it's got
Morrison
PERSON
to run he's still in parliament and I don't think he will be wanting to leave parliament until he can get another And this is hardly improving his Ability. From in the opposition would like him to go now but that creates a problem of a buyer election. Right, so Opposition leader
Peter A
PERSON
pretty difficult situation to put it mildly. And that
1 hour
TIME
press conference really didn't help him did it.
Michelle
PERSON
can you make Of of why he went ahead and and put himself in secret at the top of those ministries because although he says that he needed to do that because of the
Carefully
PRODUCT
curated those that were he could have full power unilateral power as a minister I think that the central thing come coming out of this just reinforces what we really already knew about
Scott Morrison
PERSON
as a leader that he wanted to control. He wanted How is centralized to a an incredible degree in his own hand The Gave the opportunity for him to do that on a number front he also was a leader who didn't like public exposure to To be secret and I think those
two
CARDINAL
Touristics of him Account for a great deal of what happened
To be secret and I think those
two
CARDINAL
Touristics of him really account for a great deal of what happened? Hey feels almost quite presidential quite
Trump
ORG
asking a lot of ways
Michelle
PERSON
what is the opposition need to do to get over this and become AA viable opposition party Well the best thing I believe would be if
Scott Morrison
PERSON
left the parliament as as soon as But as I say the reasons why it doesn't want to do that but while he's there he's a lightning rod for criticism of the opposition which has got Whole lot of the other problems trying to get back on its feet Therefore We're going to see if it hangs around as we expect is the there'll be more revelations there's another book coming out of
only a few months
DATE
away and that's written by Journalist she's been a very trench and critic of
Scott Morrison
PERSON
it sure has new material and so you'll have another burst just before Of criticisms of him so from your positions point of view this is a no win situation
University of Canberra
ORG
professor
Proposal
PERSON
fellow
Michelle Graton
PERSON
always great to have your insights so we continue to monitor that situation the solicitor general's advice is coming through we'll pour
Alan
PERSON
's here with another story when it comes to what's going on here in
Australia
GPE
Green Bonds and of course a part of this will be the the big push that we've had from Government in terms of making climate change are a new energy a priority but we've seen a record but setting up to be a banner year for green bonds here yeah definitely you're so far four. 6 billion Aussie dollars worth of visualants that's
about three
CARDINAL
. 2 billion
US
GPE
and starting to close in on that record that we saw
last year
DATE
of
six 1 billion dollars
MONEY
in green bonds issuance Just to put of this on the context still very small globally speaking there's
300 1 billion
MONEY
of green bonds issued globally
this year
DATE
alone but In in that direction she sent me in the obvious catalyst for change here was the new government and those new policies are
43%
PERCENT
cut in emissions by
2030
DATE
now legislated net oh by
2050
DATE
that's now legislator it all got criticized by
the Green Party
ORG
at the time like bringing a bucket of water to a house fire but it is law now and that is Starting to propel green bonds forward now that there's some policy certainty there and yeah we're seeing that reflected in the numbers of that near record amount that we're headed to by
the end of this year
DATE
. I'm here in
Sydney
GPE
more to come. When
US
GPE
inflation numbers are released. Terminal speed. People are going full risk on. Rising
Rising It seems the super car market is holding up just fine.
Lamborghini
ORG
said new records for
the first half of 2022
DATE
concluding its best
6 months
DATE
ever when he came to And profit.
Winkleman
PERSON
told us the
Italian
NORP
car maker has orders booked out through to
early 2024
DATE
. Let's speak
about 2022
DATE
now we had the
the best first 6 months
DATE
ever in our grand sister in our company's history We speak things are going strong everyday we sell more cars that we are able to produce We will hybridize all of our lineup and the year 2023 is very important for us because we will
Unveil
PERSON
the all new
Aventador
ORG
with a B 12 and a plug in hybrid system but it's also very important here in the history of Lamborghini because Going to celebrate our 60s anniversary Then we have no fear that this would be
a fantastic year
DATE
also and
the year 2023
DATE
but it's very difficult You know better than me. Stephan, okay. Well, it's going in
London
GPE
. Let's talk a little bit about that as well. Talk about the macro environment it could get significantly more tricky you've only gotta look at what is happening in
Germany
GPE
and
Italy
GPE
to get an idea of the fact that the the consumer is starting to feel squeezed even the high end consumer is having a tough time increasingly step out what kind of a year do you think you're gonna see
next year
DATE
What do you think is gonna be possible? Said it's very uncertain it's very difficult to make a forecast because also
today
DATE
with high interest rates and high inflation we're still going strong also with the the prices of energy skyrocketing And this is a very positive sign but it's very difficult I can tell you that we have a very old solid order bank which is reaching out At
the beginning of the year 2024
DATE
. So we have covered
18 months
DATE
of our production. So if there are not big banks happening we should be fine also for
the year 2023
DATE
. Take a look at how Since
April of 2020
DATE
not a lot of movement on the other side when it comes to the
Japanese
NORP
yen so pretty weak at that Discuss the outlook for
Central Banks
ORG
plus we'll take a look at
Apples delaying it's next major
iPad
ORG
software update
iPad
ORG
OS
16
CARDINAL
by
about a month
DATE
from
September
DATE
to
October
DATE
.
Apple
ORG
made the decision for a number of reasons including a still buggy stage manager multitasking interface and in order to link the launch closer to the more similar MacOS
Ventura
GPE
. Still it's an unusual move In
2011
DATE
Apple
ORG
has released its new
iPhone
ORG
and
iPad
ORG
software updates simultaneously
each year
DATE
around
September
DATE
. By staggering the releases users may find some issues around compatibility with cross device features like retracting and editing messages and iMessage The new shared
iCloud
ORG
photo library in the new feature for transferring
Facetime
ORG
calls between
iPhones
ORG
and
iPads
ORG
. It will also make it a bit harder for developers to launch apps that run on both the
iPad
ORG
and
iPhone
ORG
that require new APIs and features found across
iPad
ORG
OS
16
DATE
and iOS 16 Regardless it was still of course the right move Stage manager on
iPad
ORG
Ottawa
GPE
16
CARDINAL
is still quite buggy I don't find it particularly intuitive and it's not compatible with most iPads and many
third
ORDINAL
party apps on the App Store the Clearly need some more polish and complaints from consumers about stage manager will now no longer probably overshadow the earlier launch of the iPhone
14
CARDINAL
. I've always been a person who's just been attracted to hair I like to see and think and theorize how I can manifest these visions that I have for braiding and how I can take something that
Macy
ORG
It's a line drawing in my mind and apply that to someone's scalp We are the only culture that has here that grows out of our head the way that it Anyone from the
African
NORP
diaspora is born with this amazingly A variety of different ways of expression. I want black people to love themselves for how they naturally appear and also to appreciate the cultural practices such as writing that our ancestors have practiced For
centuries
DATE
. When
US
GPE
jobs numbers are released The power pivot. Hey Boy frankly the market has
2023
CARDINAL
laws. Welcome to day break
Asia
LOC
I'm
Heidi Strad Watts
PERSON
here in
Sydney
GPE
. We're going down to
Asia
LOC
's major market opens. The top story is
this hour
TIME
or risk golf mood to start
the week
DATE
with industrial spreading about growth threats and Awaiting clues on the feds hiking plans from
Jackson Hall
FAC
later this week
DATE
An energy crisis adding to those economic pressure Industrial power supply limits These. About that
20
CARDINAL
level but it's really about what the Officials were saying across
the week
DATE
we're looking ahead to
Jackson Hole
FAC
what will they say when it comes to the
Fan officials were saying across
the week
DATE
we're looking ahead to
Jackson Hall
FAC
what will they say when it comes to the With a lot of volatility already headed Now below that $
90
MONEY
per barrel level and bell of We continue to watch what's happening with
Iranian
NORP
supplies as well. Yeah certainly that could be something if it came back into the market help us send it oil prices low but in terms of what you just mentioned there about And hold
this week
DATE
it's certainly the major event on the calendar for us just how hawkish fed the
Fed
ORG
share
J Powell
PERSON
will be and certainly this expect Equity now looking low for
Japan
GPE
and A little bit mixed off that the yen sitting like this but certainly By
the end of the month
DATE
let's turn on now this terminal chart though because we've also got
300
CARDINAL
companies reporting in
China
GPE
this week
DATE
. The question will be whether they hit to profit is as bad as what was indicated in the data but in terms of the direction of what we've seen for stocks while we have seen at
that hour
TIME
performance that we have for
Chinese
NORP
stocks in
the second quarter
DATE
versus So we're down around eight% for
Chinese
NORP
stocks around the
12%
PERCENT
versus they get those games are nearly eight% for world stocks over
the past couple of months
DATE
so The officials in
Beijing
GPE
are really gonna have a lot of troubles here to revive those investor spirits. Yeah for more in
today
DATE
's top stories is bringing global economics and policy editor
Kathleen Hayes
PERSON
chief
North Angel
PERSON
correspondent
Andrea
PERSON
This will be the
first
ORDINAL
time that policy makers Meeting in person since
2019
DATE
what can we expect on the policy side of things? Speaking with
Bloomberg Television
ORG
J
Powell
PERSON
's a bit more of a question here and of course as you guys just said Is it going to be on inflation what what's he gonna say about what his view is how hard they're going to have to push and remember now
Jpal
PERSON
hasn't spoke
One
CARDINAL
of the biggest topics we're gonna be watching there headlines CPI breaking from
nine
CARDINAL
One% junior over year to
eight and a half percent
DATE
in
July 0
DATE
that's one of the reasons that the market so maybe the the Remember there are
528 1000
CARDINAL
in
the month of July
DATE
about double
Forecast
ORG
labor market is still strong that's it many see is a green light for the
fed
ORG
to push as hard as it needs to Is Risk recession. This is the question. How high? How fast? Is he going to signal? His willingness to push the
fed
ORG
funds rate higher. And you can see from this Economist And of course the
fed
ORG
is signing now that they are going to go up to four% by
the first half of next year
DATE
which doesn't seem to always jive with what the markets expecting. I calculate in the meantime what are we hearing from some other
fed
ORG
speakers well let's start Latest speaker on
Friday
DATE
Tom Barkin
PERSON
he's president of
the Richmond Fed
ORG
and he said that you can see let's read what exactly what he said we're committed to bringing down inflation to the
two%
ORG
target will take what it take do what it takes to get there There's a path to getting an inflation under control. I guess he means, you know, you gotta raise rates. Maybe, aggressively, but a recession could happen in the process Other beneficials have said the same kind of thing. Just really in
the last month
DATE
. Now,
Jay Powell
PERSON
is not going to signal
50
CARDINAL
or
75
CARDINAL
basis points. This is not there's no Q&A here. In fact, this isn't even public.
Kind of thing.
Last month
DATE
. There's no Q&A here. In fact, this isn't even public. Televise these are these are part of the sessions on the
Friday
DATE
morning
TIME
and the
Saturday
DATE
morning
TIME
we will all report on them but you won't actually hear what he says he'll probably give a speech I would assume that somehow Maybe I'll talk about what's the Or is it something much higher I think one more thing is that if he focuses on the ability to get the soft landing and yes we'll do what it's take but we're really betting on the south landing that could be seen as doveish I think for people that Your baby gonna have to have him come out more definitely and clearly he's hoping for a soft landing His baseline but he's ready to push hard and keep pushing like
Paul Volker
PERSON
did back in
1979
DATE
8081 82 hmm going in the other direction though is the PBOC in
China
GPE
not surprising
Steve
PERSON
given a call the economic So it adds to the headwinds of course of the
Chinese
NORP
economy that saw those
July
DATE
eco data
just last week
DATE
coming in well below expectations and yes we're gonna Reading the lawn prime rate
later today
TIME
for for bank lending which is also a trailed off considerably in
July
DATE
but those power crunch that that Seeing in This is one of the most populated provinces in
China
GPE
. It's heavily industrial as well. Lot of factories we're hearing that they authorities have extended the power cuts to factories. A number of different factories that was supposed to expire on
Saturday
DATE
but because of the extreme problems that we're With the water levels in the hydro electric dams there's not enough power for all these factors they've extended those power cuts to industrial areas of through
this Thursday
DATE
could even be longer we're we're looking at
Chungdu
GPE
has not Even AA smidgen of rain for
more than 2 weeks
DATE
. Has been a drought for
18 days
DATE
other cities and nearby provinces like Also have not had any amounts of rain
this month
DATE
. So, that is really taxing the power grid right now and that will be taxing the growth projections or the the efforts to try and stimulate some sort Broken overall slowing economy in
China
GPE
. So are we expected to see that trimming of the benchmark borrowing costs by
Chinese
NORP
banks and I guess the more important factor is is that going Given that we know there's a lot of liquidity and not perhaps as much demand. Yeah M
two
CARDINAL
is is is more than expected and then the bank lending an aggregate financing in
July
DATE
was well below expectations and well below trend for
this time of year
DATE
so this is the big problem corporate And households are reluctant to borrow right now so I think
16
CARDINAL
out of
16
CARDINAL
economist survey by
Bloomberg
PERSON
do expect that we'll get a cut
at least 10
CARDINAL
Which is more closely tied to mortgages a
six
CARDINAL
of those
16
CARDINAL
expect at least a
10
CARDINAL
basis point cut the last It was cut was in
May
DATE
it was
15
CARDINAL
basis points so we could get even bigger one on
the 5 years
DATE
so again it it's it comes back What we saw in this chart here
earlier last week
DATE
we had
the 1 year
DATE
MLF
ORG
cut it the PBOC a surprise cut that paves the way for banks then to potentially
today
DATE
at the fixing to cut the
Primrates
PERSON
. How the market trade this. Hi,
Sherry
GPE
. I think one of the main focus points for the market
this week
DATE
is what's what is that yield curve are going to do especially going into
Jackson Hall
FAC
. You know, we know that that curve flattening trade. I know has been a winner for most of
this year
DATE
but you know,
Thank you.
Japan
GPE
's government says prime minister
Fuyo Kishida
PERSON
has tested positive for COVID and has relatively mild symptoms.
The 65 year old
DATE
developed a cough and slight fever on
Saturday night
TIME
and came out positive in a
PCR
ORG
test. He's currently resting at the Prime Minister's official residents and is expected to resume duties remotely on
Monday
DATE
.
China
GPE
's latest COVID outbreak is worsening with new cases jumping by
more than 2000
CARDINAL
over
the weekend
DATE
.
The Southern Island
LOC
Tibet
GPE
and In
Hong Kong
GPE
daily
DATE
cases rose to the highest and
more than 4 months
DATE
on
Sunday
DATE
at
six and a half 1000
DATE
. The city is reopening one of its biggest isolation facilities as the surge puts pressure on hospitals.
Singapore
GPE
is revealing a colonial era law that criminalizes sex between men. Prime Minister
Lician Lung
PERSON
says removing the legal ban on sex between men is the right thing to do and something that most
Singaporeans
NORP
will now accept. Please stop short of recognizing same sex unions adding that the constitution will be amended to Definition of marriage is being between a man and a woman.
Australian
NORP
Prime Minister
Anthony Albanese
PERSON
says taming inflation is a key priority for his government. Headline inflation was running at the fastest pace in
21 years
DATE
in the
second
ORDINAL
Department will not hit
10%
PERCENT
. Global news
24 hours
TIME
a day on air and I'll remember a quick take power by
more than 2700
CARDINAL
journalists and animals and
more than 120
CARDINAL
countries I'm
Vonnie Quinn
PERSON
this is Bloombury Sherry Than
400
CARDINAL
new ventures. Decision with ANZ This is
Bloombark
PERSON
. Is it possible the industries in an arms race that will Lead to spending itself into an over supply. I mean, that has happened before We we we've looked at this very carefully and you know, the digitalization of everything. Tell me what aspect of your life, Emily? Is it becoming more digital? Well, I'm trying to prevent that but yeah. Hey COVID has accelerated that. The industry cost
500 1 billion dollars
MONEY
last year
DATE
. It's not that there's not gonna be some blitz and turns on the way and the majority of that is driven by Process technology of which
only three
CARDINAL
companies can satisfy that needle.
Bloomberg
PERSON
brings you crucial data at
Terminal Speed
ORG
. People are going full risk on. Hey
Hey Facebook Hey Economic impose Always closely washed of course for clues on the path ahead for the
fed
ORG
and other central banks that's Ahead. Sherry you mentioned
Jackson
PERSON
the whole that's gonna be a key determinant for market sentiment as we get into this trading week and our next guest says but he sees no sign that inflation data or the labor market are showing any strong signs that are sufficient for the
fed
ORG
to declare a victory on inflation
Richard
PERSON
is the cheap economist at
Anne
ORG
's and he joins us
Joins
PERSON
us now from
the Sydney Stuart
ORG
.
Richard
PERSON
, great to have you with us. So, we're all getting bit ahead of ourselves. Oh, I will. If you think back
last year
DATE
, the question was this transitory. So, this question in different forms has been asked all the way along. We can at least say The inflation numbers probably are peaking somewhere around here and we've got
Singapore
GPE
this week
DATE
. A similar story there. The real question is our policy settings consistent with withinflation returning to target band and staying around target.
Fed
ORG
phones is only Five. Expectations for Chapel. Does he use
this week
DATE
as a reset and communications particulars there's a lot of concern about the stickier parts of that inflation basket. I mean if there's Probably the reset needs to be to tell everyone to take a step back again and just look at the broader picture because I think people are getting quite narrowly focused on individual data
Lisa
PERSON
's weather inflations peaked
all night
TIME
. The fact we've had
two negative quarters
DATE
of GDP growth in the
US
GPE
rather than saying, well, hang on. We still have rates at
two
CARDINAL
. Five which is below the feds estimate of neutral. We're coming on the back of Unbelievable policy stimulus from
2020
DATE
In
2021
DATE
the labor market still we have still
two
CARDINAL
job vacancies for everyone employed person wage growth and core services inflation is still about four% double the inflation target I think the feds got quite a bit of work to do yet.
Richard
PERSON
same issue but different set of circumstances for what's happening in
China
GPE
, youth, unemployment, just soaring right now. The previously trying to support the economy. Are they doing enough? On depends what you've been mean by enough There's still seems to be some concern and I think justifiably about adding more liquidity to a system which already seems to have an excessive stock of liquidity and obviously there's been issues around Deposits and mortgages in
the last couple of months
DATE
and let's not forget the ongoing adjustment in the property sector around debt in that sector credit exposure which companies are are really viable in a much more slow slowly growing
Chinese
NORP
economy so they could definitely do do more but I It's this trade off between short term stimulus and long term trend it looks like we should just expect
China
GPE
to be a much more slowly growing economy over
the next few years
DATE
. What do you think about narrative forming
these days
DATE
about a liquidity trap because of all of the issues that you mentioned and what can the policy makers do Fix this. Look I don't know that there's a liquidity traps certainly monetary policy seems to to get less traction that it has in previous cycles but we also saw that In
Europe
LOC
after the GFC in the
US
GPE
during the
GFC
ORG
. In
Australia
GPE
in the period before the pandemic. So, this is not that unusual and and as I suggest that I don't think
China
GPE
is really Going to juice the economy up and generate much stronger growth.
Think
China
GPE
is really trying to juice the economy up and generate much stronger growth through monetary easing alone. The look that the liquidity trap elements of the policy landscape are not helping. I Think they're the primary problem though. Is it gonna be an easy transition to you say what's likely to be just a prolonged period of slower growth. I mean obviously borders not opening and COVID oh is not gonna help but There is impediments to seeing a high level of growth right? Unlikely it will be smooth but then we don't have many historical parallels. I think for me the defining feature of this pandemic for
China
GPE
is what it's done to demographics. We know the structural demographic Is quite poor but you've had at least what we know of as
two
CARDINAL
very low birth rate
years this year
DATE
is likely to be
another a year
DATE
of very low births as well. The combination of those
two
CARDINAL
things mean
China
GPE
's gone from growing quite quickly to I think In a very short space of time growing quite slowly housing is a share of GDP's housing construction is likely to have peaked because of that What things are gonna fill the hole on the other side. Will that
Carlette
ORG
's into household wealth to spending not to mention the social aspect of it as well right so how do you see the government I guess being able to being able to handle that and where does that potential future growth come from is leverage
Concerns
LOC
. I think leverage is still a concern. Even if they can just kind of shift from one hand to the other. Well, I think so because the corporate sector we know is quite reasonably leveraged as well. The house Sector in
the last 15 years
DATE
has gone from effectively nowhere to having leverage that looks more like an advanced economy and we can see as the housing sector decelerates it's problematic for the economy I think the answer is there isn't really anything to fill the hole
China
GPE
's focus more on quality of growth the distribution of growth because I think the reality is in aggregate terms
China
GPE
will grow more slowly than we've seen In in modern history.
Richard
PERSON
and of course
today
DATE
we also have
Pakistan Central Bank
ORG
decision is not necessarily The reason that I bring it up Central bank Heavily are we going to see more vulnerable nations spiraling into crisis? Look I hope not but certainly I don't think
Fed
ORG
phones is gonna give them much rest but either in the other key data I'm watching
this week
DATE
actually is export orders out out of
Taiwan
GPE
a very good barometer of the trade cycle that's almost certain Potentially quite sharply signalling where at the end of the mini export boom we've had
the last 12 or 18 months
DATE
but if fed funds finishes
the year
DATE
at four% which is our current expectation I do Economies like
Pakistan
GPE
turkey,
Argentina
GPE
,
Sri Lanka
GPE
. Unfortunately, I'm gonna feel the pinch because of that.
Richard
PERSON
always great to have you with us. We appreciate your time
Richard
PERSON
. And said here in
Sydney
GPE
planting water come here on day break
Asia
LOC
this is
Bloomberg
PERSON
. While
Tesla
ORG
's in the like make for good headlines the reality is that even if every car on the roads
today
DATE
when electric it wouldn't be enough to curb global emissions to avoid catastrophic climate change. Greenhouse gas emissions from transportation account for
about 29%
PERCENT
of total
US
GPE
greenhouse gas emissions. So what about the other
71%
PERCENT
? All electric we want to turn buildings into
Tesla
ORG
's
Vehicle is all electric with no fossil fuels. We wanna do that with our buildings and if we can do it in
one
CARDINAL
building, we can do it in all buildings
30%
PERCENT
of
US
GPE
greenhouse gas emissions. Welcome to the world of decentralized finance Bring all things crypto. Both saw double digit gains in
the first 10 days
DATE
. And Saul will begin as big as joint military exercises with
washington
GPE
after
5 year
DATE
hiatus that fail to entice
North Korea's
GPE
Kim Jong-un
PERSON
to make concessions in the sarment and talk And here's a quick check of the latest business flash headlines
Warren Buffett's
PERSON
Berkshire Hathaway
PERSON
won approval from
US
GPE
regulators to buy
as much as 50%
PERCENT
of accidental petroleum
Berkshire
PERSON
spent the year wagering more on accidental
Accidental
NORP
stock had its biggest gain in
5 months
DATE
.
Billionaire Ryan Cohen
PERSON
pocketed at a
68 1 million dollars
MONEY
profit from the sale of his steak in bed bath and beyond an investment he held for
just 7 months
DATE
while
Cohen
PERSON
scored a
56%
PERCENT
gain other retailer After Cohen's exit. How long answered management will be in focus when
China
GPE
opens for trade that's after a moody's investor service put in on review for a possible downgrade it says the bad that manager faces increasing acid quality strains after it's projected
first half
DATE
loss with the forecast that was worse than expected it rains
Territory
ORG
. Search about that
20
CARDINAL
level we had some Perhaps not surprising given all of the fat speak that we Also down
four
CARDINAL
tenths of
one%
ORG
while kiwi stock Are in the pressure despite the fact that we're seeing a pretty weak
Japanese
NORP
yen against the
US
GPE
dollar that
137
CARDINAL
level. Coming up
Singapore
GPE
set the scrub most rules on wearing masks indoors for the reason it's COVID curves we have the latest next this is
Bloomberg
PERSON
The
Indian
NORP
city of Jamnigar is a money making machine for
Asia
LOC
's richest man
Mukesh Ambani
PERSON
His company reliance has the world's biggest oil refinery complex here in the city.
Jammiga
GPE
is also where
Ambani
PERSON
is making his newest bet A
10 1 billion dollars
MONEY
investment in green energy His ambition is closely aligned with the
Indian
NORP
government's plan to reach net oh emissions by
2070
DATE
But
Barney
PERSON
is not alone.
India
GPE
's
second
ORDINAL
richest man
galta madani
PERSON
has committed
20 1 billion dollars
MONEY
of investment over
the next decade
DATE
. But
India
GPE
's massive dependencies on fossil fuels have some environmental applicants questioning the realism. Talking about that
all day
DATE
yesterday
DATE
. Largely supply driven supply shortages. Say a potential cure for inflation. Is probably supply sides related supply problems requires supply solutions not something that monetary policy is apped and so driving a recession is really a poor and sub optimal outcome. There's no need for central banks to rama recession down the throat of economies. It's simply Do not need raids to be to moving high. We just need a period of absorbing and also allowing some of those mechanism to work through work it's way through. Discussion around the Necessary to rain inflation as bring back
Annabelle
PERSON
what else you will learn from this survey? Yeah, quite a few takeaways here. Share is of course inflation. It really is the most watched indicator going into
the second half of the year
DATE
. So, you've got that question of whether it can be And gradually without really hitting consumers companies all whether the
fed
ORG
is going to be needing to be a lot more aggressive in terms of what our survey found well the vast majority of respondents said that we've actually seen the peak of price pressures in the economy despite the fact of course that
Jay Palace
PERSON
also expected to take quite a hawkish message in to
Jackson
GPE
hole
this week
DATE
let's change Whether we go from here getting down to that
two%
ORG
target we are of course it around eight. Five% now in the latest survey so we had about 900 people Now that of course what it means for company profits as well what's gonna be a negative
four
CARDINAL
stop prices because the
fed
ORG
says of all rather respond Businesses here while we are gonna see stocks really declining that is inflation takes a big On company province in
Heidi
PERSON
are so very also found that treasury should be high in
1 month from now
DATE
.
Annabelle
PERSON
is there in
Hong Kong
GPE
let's get the latest on COVID now in
Singapore
GPE
is moving to ditch the rule when it comes to mask weary across most indoor settings as it moves
Away
PERSON
from pandemic era restrictions
Emma O'Brien
PERSON
who's our editor for managing others for
Asia Golden Business Trains
FAC
is here in
Sydney
GPE
with the details and
Emma
PERSON
you kinda have to remind yourself We've come to this point from
Singapore
GPE
really having some of the stricters, COVID settings in the world at
one
CARDINAL
stage. Yeah, I mean, it's a really interesting example when you compare it to
China
GPE
. For instance, yeah, I mean,
a year ago
DATE
,
Singapore
GPE
Was trying to eliminate COVID as well. Very very strict border curb sand and internal curb.
For instance yeah I mean
a year ago
DATE
Singapore
GPE
was was trying to eliminate COVID as well very very strict border curb sand and internal curbs as well And they have sort of kept a lot of those shedding them just gradually when it comes to the internal stuff prioritizing that opening at the border and in in that you can come and go Easily from
Singapore
GPE
but yes the the last sort of vestages of those internal curves the indoor mask wearing mandate in
Singapore
GPE
being done away with you will still need to wear it in hospitals nursing homes and and other sort of vulnerable situations but other A step toward minimality for
Singapore
GPE
there.
More than 2000
CARDINAL
new cases in the latest testing. This is a lot Vacation free hotspot A lot of the cases in
China
GPE
are coming up in tourist hot spots in tourist places to bet
Shincheang
PERSON
Was another one a month or so ago and we are seeing lockdowns come where they are travelling trapping travelers and holiday makers in the process and you've gotta think that it's gonna have a hit to consumption and to sentiment Around domestic travel which is of course the only sort of travel that
Chinese
NORP
people can actually do right now. And of course we continue to see those cases in
Japan
GPE
and now we're hearing that Prime Minister
Kishina
PERSON
has tested positive. Yeah, that's right.
Japan
GPE
seems to be sort of at the pico of their way every country on sort of
slightly Tens of thousands
CARDINAL
of new cases a day Exemplify by by
Kashida
GPE
's infection apparently he's doing okay and we'll resume some duties
today
DATE
of course isolated. I'm
O'Brien
PERSON
with the latest on the pandemic across
Asia
LOC
right now. Let's go to
Bonnie Quinn
PERSON
with the
first
ORDINAL
word headlines. Funny.
Sherry
ORG
, thank you. The
Chinese
NORP
province of Industrial power cuts to deal with what it calls extremely outstanding deficiencies and supply officials say blistering temperatures and surging demand for air conditioning of course gaps and the generation of the power in order limiting power supply to some industrial users will reportedly be extended to
Thursday
DATE
from
Sunday
DATE
's original end date.
Richmond
GPE
fund president
Thomas Barkins
PERSON
has the central bank is committed to taming
US
GPE
inflation even if that means risking a recession.
Barkin
PERSON
says policy makers will do what it takes to return inflation to their
two%
ORG
target. While acknowledging that a recession could happen in the process. Recent
fed
ORG
speakers have agreed more rate hikes are needed while debating the size of the next move.
India
GPE
's food department says it is no plans to import heat with current stocks efficient to meet requirements reserves decline to their lowest
monthly
DATE
level in
August
DATE
while prices have surge
nearly 12%
PERCENT
Government officials are now discussing whether to cut or abolish a
40%
PERCENT
import tax on wheat to help flower millers in some regions get supplies
Germany
GPE
may not be able to replace all its imports of
Russian
NORP
natural gas this winter and might have to resort to nuclear power.
Decades
DATE
has forced politicians to look at alternatives including atomic energy which
Germany
GPE
had decided to Journalist analyst and
more than 120
CARDINAL
countries I'm
Bonnie Quinn
PERSON
this is
Boomberg
PERSON
. Cherry. Incubate funds
Paul McAndrew
PERSON
joins us next this is
Bloomberg
PERSON
Bloomberg
PERSON
surveillance early edition for the news you need when you need it In
New York
GPE
and
Anna Edwards
PERSON
in
London Retail
ORG
earnings from both home depot and Walmart Hey Facebook Consumer spending. Be prepared via head of the game. There's a really reminder isn't it just how sensitive the markets are to any commentary about trade we did see some pressure on the
UN
ORG
we did see some pressure on the future that is now being reverse
Japanese
NORP
futures under a little bit of pressure despite the fact that we have a pretty weak
Japanese
NORP
yen holding at that one
Strength
ORG
of the US dollars we look Head to
Jackson Hall
FAC
and expect that official to talk about the rate past forward we have already had pretty hawkish fetch really pointing
two
CARDINAL
more rate hikes But right now
Japanese
NORP
futures under pressure and this of course as we continue to look ahead to the open delve into
Japan
GPE
start Feed stage venture capital form incubate fund which has managed over
four and a half
DATE
one 1 billion dollars
MONEY
and invested in
more than 400
CARDINAL
startups with us Across
Japan
GPE
.
Good morning
TIME
and thanks for having me here. Delighted to be here. As you noted incubate fund is a seed stage fund based at
Tokyo
GPE
I need
Japan
GPE
today
DATE
the
VC
PERSON
environment I think's exciting for a couple of reasons one is that Deployment of of capital of
VC
PERSON
has increased by
nine
CARDINAL
times over
the past 8 years
DATE
. It's now at roughly just south of eight 1 billion
US
GPE
. And as you know the before the government
Japanese
NORP
government has the aspiration to take that
up to 10
CARDINAL
times over
the next 5 years
DATE
but on top of that I think the scale of the economy being the
third
ORDINAL
largest economy but also having massive upside in terms of capital and labor productivity
Potential
PERSON
is what makes me excited about
VC
PERSON
in
Japan
GPE
. How do you feel about Prime Minister
Kishi
PERSON
that's initiative to try to buy a more direct purchasing by the
Japanese
NORP
government as well I think I think it's probably the most exciting the initiatives that have been announced many governments around the world have made different attempts to spark and drive
VC
PERSON
but I think the one of the most successful is the small business innovation research program in the
US
GPE
which says I understand it is is what
Japan
GPE
is modeled this program after and direct purchaseing by
Japanese
NORP
government Especially deep text startups if you think about space healthcare cyber security can make a massive difference in inventions just getting started Well what do you think the biggest change
Japan
GPE
needs right now particularly in the context of being able to And then foster a greater level of innovation. I think there's a couple in addition to the direct purchasing. I think one is capital location.
For a greater level of innovation. I think there's a couple in addition to the direct purchasing. I think one is capital application. The
GPO
ORG
obviously operates independently through gatekeepers but there's been an increase in allocation to alternatives from
GPIF
ORG
. I think the
Japanese
NORP
government as well is also planning to invest more adventure funds and I think that'll create a For a couple and I think the other big piece is Making
Japan
GPE
or continuing make
Japan
GPE
and attractive destination for both founders and VCs from overseas In addition to helping with talent domestically Changes in for example the the tax treatment of stock options so I'd I'd say they're the big ones that can further drive this. The incubate us approach is quite interesting right so if I understand it you have kind of AA collection Ideas and and businesses that you would like to find and then you try and find the the founders that might share that. Yeah, that's right. So, typically,
Avenger Farm
ORG
might take
500
CARDINAL
companies and work through stage guides to establish the the best opportunity We'd take the reversal approach we have a set of ideas each of the general partners of the firm has
12
CARDINAL
to
15
CARDINAL
businesses we like to build And we search for founders who are passionate about those ideas so it's it's very much precede most of the time we invest when there's only literally a founder and maybe a business plan so that takes a certain skill set but it's work very well over the
Paul
PERSON
tell us a little bit about the start of culture in
Japan
GPE
because of course we know that one of the best ways for people to accumulate wealth in
Japan
GPE
has been going the corporate way becoming a salary man having those employment jobs for life for young
Japanese
NORP
people what's the mentality they've been so far when Risk taking an innovation for young entrepreneurs It's an excellent point. I think what's happened under the radar that people don't realize in
Japan
GPE
is the notion of an elite path in
Japan
GPE
's change pre-dramatically over
the past 10 years
DATE
.
10 years ago
DATE
I was formally at a at a consulting firm
10 years ago
DATE
colleagues and colleagues would leave for private equity or multinationals Over
the past 2 or 3 years
DATE
I'd say
60 or 70%
PERCENT
of people leaving top tier professional services firms are going to start ups And so the notion of you know trading company on
Mega Bank NBA
ORG
and a lifetime career is shifted quite quickly to people wanting to get some experience in business but then quickly moving to startups so I'm I'm excited about that shift and I'm not sure if people really realize that. And do you have them
Italian
NORP
pipeline
Anita
PERSON
in order to fund all of these businesses are
Facilities
ORG
actually helping these young potential entrepreneurs to to really get into the field and and be able to make something out of their ideas Yeah more and more there's there's more accelerators incubators there's more university programs around entrepreneurship importantly there's also a massive gap in
Japan
GPE
around digital you know
Programming
ORG
and data science and engineering and more universities and interesting those programs so you're seeing an ecosystem build around the talent side of it to provide more talent now to be clear there's a big gap there's basically the
US
GPE
for example But it's heading in the right direction What else can the government do at this point in order really to get a
Japan
GPE
to that point because we have seen not only with this admin
Pledging Administration
ORG
from the
Kozumia
PERSON
What's changed so far how much progress has there been and what else needs to be done? I I think the progress has come with well the the shift that I'm seeing
today
DATE
is the willingness of the government to be more direct in in a sense in intervening to to give venture companies ahead start So if you're thinking about the
SBIR
ORG
program in in the
US
GPE
and other programs like that and you look at some of the
US
GPE
's most successful deep tech firms in space. They've really got their start through that direct voting. So, I think that has been something where traditionally in
Japan
GPE
, I think, you know, a fair process and auctions has been a big emphasis but I I think people starting to realize that if a company had
Has been a big emphasis but I I think people are starting to realize that if a company has That's that's valid that the direct purchase thing in a more efficient purchasing progress is gonna process is gonna make a difference So I think that would be the the biggest you know shift. It's good to hear
Paul McCartney
PERSON
general partner are the incoming fund it's good to have you with us thank you you can watch this Discuss discussions on our
Function
ORG
. This is for boom work subscribers only. Check it out. A TV go. And coming up next at
South Korea's
GPE
biggest car sharing service is making its market debut details on so cars opening day straight ahead. This is bloom bar. Economic policy symposium Discuss the economic issues and solutions that keep the world's money moving Across
China
GPE
we see infections now surging to that
Month
DATE
hi when it comes to
Shanghai
GPE
as reporting
four
CARDINAL
local COVID cases
Sunday
DATE
. Again, Sonia,
550
CARDINAL
Shanghai
GPE
,
four
CARDINAL
local cases as we continue to watch those developments very closely in case we might see more lockdowns given the infections rising across Free. Take a look at Bitcoin rebounding invigation session a little bit but this of course after suffering a sharp sell off as global markets turn risk golf as a
fed
ORG
reader rates as resolved to keep raising interest rates until inflation is contained let's get From our cross as a team at
Rojuana
ORG
also
Georgiana
ORG
so What's going on with crypto prices right now? I mean we're seeing a lot of volatility but it seems to me that it's all about how risk us it's due at this point. It is. That's a big part of it. Just generally with the macaroon. There's a lot of uncertainty and so encrypto is going along with the risk assets But it is also pretty volatile just generally and
Friday
DATE
we had a really big drop in a span of
just a few minutes
TIME
and now Bitcoin went from kind of making a move higher to really being back below it's
50 day
DATE
moving Average other cryptocurrencies have also kind of been depressed in
the past few days
DATE
so you have a lot of them down say
10 to 16%
PERCENT
so there is a little bit of suffering right now John I've been hearing about
Ethereum
PERSON
's big merge does that change things in terms of the power structure? Yeah, this one's pretty interesting. So, you know, the the merge upgrade is is supposed to make make a theory less power consuming and that sort of thing but it's Going to change the overall structure of kind of influence and we're going to have builders
Make a theory less power consuming and that sort of thing but it's also going to change the overall structure of kind of influence and we're going Instead of just minors and these builders will be able to kind of send the transactions around to different different groups and there is some concern that they could you know send everything to one validators something like this But you know the and there aren't a whole lot of builders at this point. There have been a lot of the different liners. So the the builders and other people really affiliated with
Ethereum
ORG
have said that this isn't going to be a And that it's going to work out. They're going to spread everything around but there have been some concerns about especially initially The builders could make things kind of more centralized and consolidate power. Across as a team editor
Joanna Ossenger
PERSON
there were the latest let's get you a quick check of latest business splash headlines
United Health Amazon CVS Health and Option Care Health
ORG
are said to be among the bitters for signify health sources telling
Bloomberg
PERSON
that
United Health
ORG
has submitted the highest bid in excess of $
30
MONEY
a share
Amazon
ORG
's offer is close behind signifies holding a board meeting on mandate to discuss those bids which could be announced
as early as this week
DATE
.
Japanese
NORP
trading house with
Sue
PERSON
has reportedly decided to keep its investment in the natural gas venture that's after President
Vladimir Putin
PERSON
ordered a shift in the project operator to
Russian
NORP
entity the
Nico
ORG
says
Mitsui
ORG
's no damage to its interests and plans to make a formal notification as soon as this Indexes is adding
Beijing Energy
ORG
pharmaceutical to the
Cut
ORG
those changes to take effect on
September 5
DATE
. PTMCO VJ
Sharma
PERSON
is staying in charge of the spark calls for him to be replaced and in fact, Shareholders voted at their
annual
DATE
general meeting to keep
Sharma
GPE
advisory firms earlier called for a vote against his rear appointment
ATM
ORG
has lost
more than 60%
PERCENT
of his value since the
IPO
ORG
. Because of more Really the current market conditions that are both well for the company Yes, good
morning
TIME
.
Heidi
PERSON
. So, yes, so
Car
PERSON
was one of the key beneficiaries during the pandemic. Any Big user base crews and revenue girls during the pandemic but this fight is gross during the pandemic the company's IPO process was pretty disappointing it's it Share floats and
first
ORDINAL
they pop and Cars right now valued slightly lower than
100000000001
DATE
based on as soon as you're offering price and that's
about less than half
CARDINAL
or
about half
CARDINAL
of this two to 300000000001 valuation that was expected And the company is still decided to go ahead having
two
CARDINAL
flashes by peel size significantly due to like loss or demand I feel in
South Korea
GPE
as you mentioned. What are we expecting in terms of the debut So it will be a big surprise if there is a birthday pop
today
DATE
at the solar given very light last year demand during danger public offering the company's also At a time one menu of the many of us protect companies One public with landmark reviews and during the pandemic are trading far below their offering prices so we'll